CAIE A-Level Economics 4.3.9 AS shifts
Practise analysing shifts in SRAS and LRAS from wages, oil prices, productivity, taxes, subsidies and long-run capacity changes.
- Syllabus
- 2026–2028
- Course
- Economics 9708
- Level
- AS
Exam points
- use an AS diagram to show how wages, oil prices, taxes or subsidies shift SRAS
- explain how productivity or capacity changes can increase AS and affect output and prices
- evaluate benefits and costs of higher AS for inflation, growth, employment and trade-offs
4.3.9—AS shifts question 1
[Maximum number: 12]
Analyse the causes of an increase in aggregate supply. Discuss the extent to which this might be beneficial for an economy.
For analysis that explains any causes of an increase in AS (Up to 4 marks)
For analysis that explains any the costs and benefits of the increase in AS (Up to 4 marks)
(AN: up to 8 marks)
For evaluative judgement on whether the increase in aggregate supply will have be of overall benefit with 1 mark reserved for a reasoned conclusion.
(EV: up to 4 marks)
12
Aggregate supply can increase for many reasons such as advances in technology, improved education and training, net immigration, net investment, discovery of new resources and so on. Reference to short and long run is relevant.
Benefits include a rise in the standard of living, more leisure time, new products, etc.
The possible costs include a rise in unemployment, depletion of resources.
An evaluative comment might be that it depends upon the existence or otherwise of a deflationary gap.
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