Unit 3: Macroeconomics
Topic 3.2: Variations in Economic Activity — Aggregate Demand and Aggregate Supply Questions
Practice 20 exam-style questions for IB Economics Topic 3.2. Review the question stems below, then unlock the full Question Bank to access markschemes, model answers, and AI grading.
2Define2 marks
2026
Define the term investment as used in the circular flow and in aggregate demand.
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Explain the components of aggregate demand.
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2026
Sketch an AD/AS diagram showing the effect of a rise in production costs on real GDP.
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A negative supply-side shock would result in:
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2026
Sketch an AD/AS diagram showing the effect of a fall in consumer confidence.
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Explain the difference between an inflationary gap and a deflationary (recessionary) gap.
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Explain the difference between a movement along the AD curve and a shift of the AD curve.
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2026
Sketch an AD/AS diagram showing the effect of a rise in exports on real output.
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2026
Sketch an AD/AS diagram showing the effect of a rise in investment.
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The short-run aggregate supply (SRAS) curve is upward sloping because:
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Explain why the AD curve is downward sloping.
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Explain how a negative supply-side shock can cause stagflation.
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The aggregate demand curve slopes downward because:
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Which of the following would cause a rightward shift of the AD curve?
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A decrease in consumer confidence would most likely:
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A rightward shift of the LRAS curve would result from:
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A positive demand-side shock, such as a large increase in consumer spending, would most likely result in:
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