Aggregate Supply | Edexcel A-Level Economics A (9EC0)
Aggregate Supply
- 62 questions
- 4 subtopics
- Theme 2: the UK economy, performance and policies
- Paper 2 and Paper 3
Covers the productive side of the economy: what the aggregate supply curve shows, what moves it in the short run, and the disagreement between Keynesian and classical economists about its long-run shape..
It covers the characteristics of AS, short-run AS, keynesian and classical views of the LRAS curve and what shifts long-run aggregate supply.
Sample questions from Aggregate Supply
Answer each one closed book first, then open the answer.
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The characteristics of AS
How do changes in raw material prices affect the SRAS curve?
Show the answer
Higher raw material prices increase production costs, shifting the SRAS curve leftward; lower prices shift it rightward. -
The characteristics of AS
How does a change in the quantity of labour affect the LRAS curve?
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An increase in the quantity of labour shifts the LRAS curve rightward; a decrease shifts it leftward. -
Short-run AS
If a country relies heavily on imported oil and its currency depreciates, what would happen to SRAS?
Show the answer
SRAS would decrease because the domestic currency cost of imported oil rises, increasing firms' production costs. -
Short-run AS
Give two examples of government-imposed costs that can influence short-run aggregate supply.
Show the answer
Employer national insurance contributions and business rates. -
Keynesian and classical views of the LRAS curve
At what point does the Keynesian LRAS curve become vertical?
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The Keynesian LRAS curve becomes vertical only at full capacity, where no further increases in real output are possible regardless of price level changes. -
Keynesian and classical views of the LRAS curve
If an economy has substantial unused resources, what would the Keynesian model predict about the effect of increased demand on prices?
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Prices would remain stable because the economy is operating on the horizontal section of the Keynesian LRAS, where spare capacity allows output to expand without inflationary pressure. -
What shifts long-run aggregate supply
How does deregulation typically affect the long-run aggregate supply curve?
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Deregulation typically shifts LRAS to the right by reducing costs and barriers to production, allowing firms to produce more efficiently. -
What shifts long-run aggregate supply
How can competition policy increase long-run aggregate supply?
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Competition policy promotes efficiency, innovation and lower costs through greater market competition, increasing productive capacity and shifting LRAS to the right.
The 4 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| The characteristics of AS | Recall questions on what the AS curve shows, its shape, and the difference between a movement along it and a shift of it. | 20 |
| Short-run AS | Recall questions on how raw material and energy costs, the exchange rate, indirect taxes and government-imposed costs such as employer national insurance and business rates shift SRAS, all acting through firms’ costs of production. | 16 |
| Keynesian and classical views of the LRAS curve | Recall questions on the vertical classical curve and the Keynesian curve that is horizontal at low output, and what each implies for policy. | 8 |
| What shifts long-run aggregate supply | Recall questions on technology, productivity, education and skills, regulation, demographics, migration and competition policy. | 18 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel A-Level Economics A Active Recall Guide
Every topic, not just this one. 2,508 questions with their answers.