·  “An increase in aggregate demand may not lead to an increase in real national income.” To what extent is this statement valid? [15]

·  Discuss the view that economic growth can only be achieved at the expense of other macroeconomic objectives such as a low and stable rate of inflation and equity in the distribution of income. [15]

·  Explain, using a diagram, how interest rates are determined in an economy. [10]

·  Explain the causes of economic growth in terms of an increase in actual output and an increase in potential output. [10]