What this practice covers
These questions are drawn from past CIE 9708 papers and filtered to aggregate demand and aggregate supply analysis. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising Paper 1 MCQs →
What examiners see students get wrong here
These are the errors that cost marks on aggregate demand and aggregate supply analysis, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- AD is simply consumer demand. Wrong. AD includes C, I, G and net exports.
- Imports are added. Wrong. Imports are subtracted because they are not domestic output.
- Transfer payments are directly part of G. Wrong. They are not purchases of current output.
- Investment means buying financial assets. Wrong in the AD identity. Investment means expenditure on capital goods and related additions to productive capacity or inventories.
- A price-level change shifts AD. Wrong. It causes movement along AD.
- A higher price level shifts SRAS. Wrong. It causes movement along SRAS.
- Higher AD always raises real output by the same amount. Wrong. The result depends on spare capacity and the shape of AS.
- Higher AD always reduces unemployment greatly. Wrong near full employment or where supply constraints dominate.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Aggregate Demand and Aggregate Supply Analysis revision notes.