Economists use specific letters to label each of these terms. In each case, identify whether the change is an increase or a decrease. In each case, assume that this is the only change. The government raises tax allowances. The government reduces child benefit.
Fewer tourists visit the country.
The following diagram shows an aggregate demand curve and an aggregate supply curve. Give your answer to one decimal place. 1997 Price index 105.9 109. 118.2 121.1 125.6 Rate of inflation 7. The government cuts interest rates and the economy booms.