Question 9 - A decrease in AD means there will be less disposable income for households and therefore less spending on imports, thus reducing the current account deficit. It cant’t be C because a decrease in AD will mean an increase in gov spending and decrease in taxes due to the automatic stabilisers and the gov would probably adopt expansionary policy because of the fall in AD anyway.
11- My thought process would be the answer is B because an increase in spare capacity means that business confidence will be low and also there will a reduction in Demand for g/s so forms will be less likely to invest.
18 - The answer is C because they expansionary monetary policy will increase AD thus reducing the rate of unemployment while an increase in supply side policies will lead to actual and potential growth, thus increasing the long term trend rate of growth.
They wouldn’t give them two options as both would be correct in fixing those problems.