Economics (AS & A Level) · Oct / Nov 2022 · Paper 13 · Question 26
9708Price stability
Which statement about changing price levels is correct?
- AAnyone on a fixed income has rising real income during deflation.
- BGovernment revenue from indirect taxes falls during inflation.
- CProducers prefer deflation to inflation.
- DSavers prefer index-linked savings when there is deflation rather than inflation.
As printed in the paper
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Correct answer: A. Anyone on a fixed income has rising real income during deflation.
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