Inflation and Deflation — AQA Past Paper Questions

Extract C (lines 4–5) states ‘Energy and food bills had risen dramatically due to shocks to the economy, such as labour shortages, a depreciation of the pound…’ With the help of a diagram, explain how a depreciation of the pound may cause inflation.

2.2.5 Determinants of SRAS · 2.3.3 Inflation and Deflation

Assess whether an increase in the money supply is always damaging for an economy.

2.4.3 Central Banks and Monetary Policy · 2.3.3 Inflation and Deflation

Us ing th e data in Extract D (Figure 4), calculate South Korea’s rate of inflation for the year ended 31 December 2019. Give your answer to two decimal places.

2.3.3 Inflation and Deflation

Evaluate the possible impact on the cost of living and the standard of living in the UK of a sustained rise in the value of the pound sterling against other currencies, such as the euro and the US dollar.

2.3.3 Inflation and Deflation · 2.1.4 Uses of National Income Data

Explain the main causes of a rise in inflation.

2.3.3 Inflation and Deflation

Evaluate the view that inflation is always preferable to deflation.

2.3.3 Inflation and Deflation

Using the data in Extract D (Figure 3), calculate, to two decimal places, the mean inflation rate for Japan from 2010 to 2015.

2.3.3 Inflation and Deflation

Explain how the data in Extract D (Figure 4) show that Japan has been less successful than the UK in achieving a stable rate of economic growth.

2.3.3 Inflation and Deflation · 2.1.1 Objectives of Government Policy

Extract F (lines 19–20) states ‘What is not clear is what should be done if low inflation turns to bad deflation.’ Using the data in the extracts and your knowledge of economics, evaluate the view that monetary policy is the most effective way of tackling deflation in developed economies such as the UK and Japan.

2.3.3 Inflation and Deflation