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Economics (AS & A Level) · Oct / Nov 2024 · Paper 13 · Question 15

9708Price stability

A country experienced an annual deflation rate of 2% for four successive years. Which statement is correct for the four-year period?

  1. AThe price level fell by 8%.
  2. BThe price level fell by less than 8%.
  3. CThe real value of money fell by 8%.
  4. DThe real value of money fell by less than 8%.

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Correct answer: B. The price level fell by less than 8%.

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