Pearson Edexcel IAL Economics 2.3.2.1b Components of aggregate demand: o

Practise calculating aggregate demand from C, I, G and net exports, then showing AD curve changes from real macroeconomic data.

Exam points

calculate AD or consumption from C + I + G + (X-M) using table data in context
draw an AD shift from a net export change and label price level and real output
interpret import and export values as net exports within aggregate demand

[Maximum number: 4]

The table shows selected macroeconomic data for an economy in 2022.

Table for Question 2.3.2.1b - Components of aggregate demand: of AD • C + I + G + (X-M) = • the AD curve question 1 — Edexcel A-Level Economics AS

Ceteris paribus, calculate the value of aggregate demand for this economy in 2022. Show your workings.

Knowledge 1, Application 3

Quantitative skills assessed:

QS9: Interpret, apply and analyse information in written, graphical and tabular forms

Knowledge

1 mark for correct definition or formula for AD:

- C+I+G+(X-M) (1)

Application

Up to 3 marks for correct application:

- $\$ 15.76 b n+\$ 2.30 b n+\$ 6.14 b n(\mathbf{1})+(\$ 8.43 b n-\$ 7.01 b n)$ (1)

- = $25.62 billion (1)

NB If the correct answer is given ( $ 2 5. 6 2 billion/$25.6 billion /$26 billion), award full marks regardless of working

NB If the answer is given as $ 2 5. 6 2 / $ 2 5. 6 / $ 2 6 without the billion sign, award only 3 marks

(4)

Question

With reference to Guinea, explain one likely impact of higher real
incomes on subjective happiness.

Mark

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2.3.2.1b - Components of aggregate demand: of AD • C + I + G + (X-M) = • the AD curve question 1