Determinants of Long-Run Aggregate Supply — AQA Past Paper Questions

Explain how the data in Extract A show that higher productivity may result in higher living standards.

2.2.6 Determinants of LRAS · 2.1.4 Uses of National Income Data

Extract B (lines 4–5) states: ‘Historically, productivity has increased over time, which has contributed to real wage rises and improved living standards.’ Using the data in the extracts and your knowledge of economics, assess the view that the government should make raising productivity a priority in order to improve living standards in the UK.

2.2.6 Determinants of LRAS

Extract E (line 14) states: ‘Investment in R&D has been an important driver of economic growth and industrial progress.’ With the help of a diagram, explain how investment in research and development (R&D) can help to increase the long-run growth rate of an economy.

2.2.6 Determinants of LRAS

Extract C (line 19) states: ‘Improving workers’ productivity is the key to increasing real GDP’. With the help of a diagram, explain how improving productivity should lead to rising real GDP.

2.2.6 Determinants of LRAS

Extract E (lines 9–10) states ‘Improvements in productivity on the supply side of the economy could actually lead to more deflation.’ With the help of a diagram, explain how improvements in productivity could cause deflation.

2.2.6 Determinants of LRAS