Quelpr
8 marksBasic Keynesian Models

CAPE Economics Unit 2 · 2016 · Paper 2 · Question 1(d)

Discuss TWO ways in which businesses adjust their level of inventory investment if the level of GDP is in disequilibrium.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 1(a)(i)Define the term 'equilibrium level of output'.[2 marks]
  2. 1(a)(ii)Outline TWO factors that could account for the volatility of investment spending.[4 marks]
  3. 1(b)Differentiate between the 'investment curve' and the 'investment demand curve' for an economy.[4 marks]
  4. 1(c)(i)Explain why the information in Table 1 essentially describes an investment demand curve.[3 marks]
  5. 1(c)(ii)Using the information in Table 1, graph the investment demand curve.[4 marks]

More practice: the rest of this paper · more Basic Keynesian Models questions · all CAPE Economics Unit 2 past papers