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Economics (AS & A Level) · Oct / Nov 2022 · Paper 12 · Question 21

9708Price stability

Which effect of inflation is described as redistributive?

  1. Athe improvement in the terms of trade
  2. Bthe deterioration in the balance of trade
  3. Cthe inconvenience of frequently changing prices
  4. Dthe loss of purchasing power for people on fixed incomes

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Correct answer: D. the loss of purchasing power for people on fixed incomes

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