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Sample 1

1. (a) Illustrate using a suitable diagram how a period of recession can increase levels of poverty in the economy. [10 marks]Poverty is a state in which an individual or community lacks the financial resources and essentials for a minimum standard of living. Recession is a period of economic decline where GDP falls for at least six months. The diagram above shows the Keynesian AD/AS curve falling from AD1 to AD2. When...

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