Day: May 16, 2023

In the long run, productive potential in an economy grows at an average rate of 3% per year.

In a particular year actual growth is zero because of a fall in domestic consumption.

What is likely to occur?

Select ONE answer:

1. an increase in the rate of inflation
2. an increase in the trade deficit
3. an increase in unemployment
4. a reduction in the government budget deficit

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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