Inflation
4.7What the syllabus asks of you
- Definitions of inflation and deflation
- Measurement of inflation: measurement of inflation using the Consumer Prices Index (CPI)
- Causes of inflation: demand-pull
- Causes of inflation: cost-push
- Consequences of inflation: how inflation affects savers, lenders and borrowers
- Consequences of inflation: consequences of inflation for consumers, workers, producers/firms and the economy
- Policies to control inflation: the range of policies available to control inflation and their effectiveness
Read the notes first
Chapter 4: Inflation
Drill this topic
Every question on Inflation, untimed, marked as you go.
Make a worksheet
Choose the years and how many questions, then print it with the answers on separate pages.
65 questions
1May / June 2026 · Paper 11 · Q18Show mark scheme →
AA government budget surplus is guaranteed.
BFalling prices are always a good thing.
CGreater economic certainty will increase investment.
DMenu costs and shoe-leather costs will be zero.
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2May / June 2026 · Paper 11 · Q24Show mark scheme →
Acurrency depreciation
Bdeflation
Cfalling inflation
Drecession
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3May / June 2026 · Paper 12 · Q24Show mark scheme →
A2019
B2020
C2021
D2022
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4Oct / Nov 2025 · Paper 12 · Q24Show mark scheme →
Ayear 2 to year 5
Byear 2 to year 3
Cyear 2 to year 4
Dyear 4 to year 5
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5Oct / Nov 2025 · Paper 13 · Q24Show mark scheme →
Aincomes will fall in real terms
Bsavings will fall in real terms
Cthe rate of interest will rise
Dthe real value of debt will rise
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6May / June 2025 · Paper 11 · Q24Show mark scheme →
Afood
Bhousing
Crecreation
Dtransport
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7May / June 2025 · Paper 12 · Q21Show mark scheme →
Athe rate of absolute poverty
Bthe government budget deficit
Cthe level of unemployment
Dthe rate of inflation
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8May / June 2025 · Paper 12 · Q24Show mark scheme →
Ademand for goods and services in country X: 5% decrease; supply of goods and services in country X: 5% decrease
Bdemand for goods and services in country X: 5% decrease; supply of goods and services in country X: 5% increase
Cdemand for goods and services in country X: 5% increase; supply of goods and services in country X: 5% decrease
Ddemand for goods and services in country X: 5% increase; supply of goods and services in country X: 5% increase
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9Oct / Nov 2024 · Paper 12 · Q23Show mark scheme →
A
B
C
D
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10Oct / Nov 2024 · Paper 13 · Q23Show mark scheme →
AClothing prices have fallen.
BLiving standards remain unchanged.
CThe average price level is unchanged.
DThe proportion of income spent on food has risen.
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11May / June 2024 · Paper 11 · Q23Show mark scheme →
Athe cost of updating existing price lists
Bthe level of business confidence
Cthe real income of fixed-income earners
Dthe real value of consumer debt
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12May / June 2024 · Paper 12 · Q18Show mark scheme →
Ainterest rate increase, government spending increase
Binterest rate increase, government spending reduce
Cinterest rate reduce, government spending increase
Dinterest rate reduce, government spending reduce
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13May / June 2024 · Paper 12 · Q23Show mark scheme →
Adomestic cooking oil
Bhomemade clothes
Cmilk
Dpersonal mobile phones
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14Oct / Nov 2023 · Paper 12 · Q23Show mark scheme →
AThe money supply doubled.
BThe price level halved.
CThe purchasing power of money halved.
DThe real value of money doubled.
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15May / June 2023 · Paper 11 · Q23Show mark scheme →
Acitizens who are receiving fixed state benefits
Bcitizens who earn fixed incomes
Ccitizens who have lent money at a fixed rate of interest
Dcitizens who have borrowed money at a fixed rate of interest
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16May / June 2023 · Paper 12 · Q19Show mark scheme →
Acompanies who sell abroad
Bforeign tourists visiting the country
Cthose living on their savings
Dthose who are repaying borrowed money
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17Oct / Nov 2022 · Paper 12 · Q22Show mark scheme →
Aa reduction in exports
Ba reduction in government spending
Can increase in the rate of interest
Dan increase in trade union power
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18Oct / Nov 2022 · Paper 12 · Q24Show mark scheme →
AFrance: earnings +6.5, consumer prices +3.5
BGermany: earnings +4.0, consumer prices +4.0
CJapan: earnings +4.0, consumer prices –1.0
DUK: earnings +6.5, consumer prices –2.0
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19Oct / Nov 2022 · Paper 13 · Q13Show mark scheme →
AIncome tax rates have increased.
BPrices have risen.
CSavings have fallen.
DWages adjusted for inflation have fallen.
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20Oct / Nov 2022 · Paper 13 · Q22Show mark scheme →
AIt reduces business confidence.
BIt reduces export competitiveness.
CIt reduces purchasing power.
DIt reduces real incomes.
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21Oct / Nov 2022 · Paper 13 · Q24Show mark scheme →
AFrance
BGermany
CJapan
DUK
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22May / June 2022 · Paper 11 · Q14Show mark scheme →
Ayes / yes / yes
Byes / no / yes
Cyes / no / no
Dno / yes / yes
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23May / June 2022 · Paper 11 · Q29Show mark scheme →
Aconsumer demand
Beconomies of scale
Cforms of competition
Dinflation
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24May / June 2022 · Paper 12 · Q22Show mark scheme →
Adecrease exchange rates; increase interest rates
Bdecrease interest rates; increase exchange rates
Cincrease government spending; decrease interest rates
Dincrease interest rates; decrease government spending
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25Oct / Nov 2021 · Paper 12 · Q16Show mark scheme →
AIt was facing a recession.
BPrice levels were falling.
CTotal demand was rising.
DUnemployment was falling.
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26Oct / Nov 2021 · Paper 12 · Q17Show mark scheme →
Aa surplus of skilled labour
Bhigher government expenditure
Chigher tax rates
Dlower net exports
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27Oct / Nov 2021 · Paper 12 · Q21Show mark scheme →
Aby calculating the change in the price of goods and services from one year to the next
Bby calculating the real value of all output of goods and services in an economy
Cby calculating the total number of people willing and able to work but cannot find work
Dby calculating the total value of exports minus the total value of imports
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28Oct / Nov 2021 · Paper 13 · Q17Show mark scheme →
AThey encourage cheap imports.
BThey increase demand.
CThey reduce firms’ costs.
DThey require wages to fall.
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29Oct / Nov 2021 · Paper 13 · Q21Show mark scheme →
Aan increase in consumer spending in an economy
Ban increase in living standards
Can increase in the average cost of living
Dan increase in the purchasing power of money
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30May / June 2021 · Paper 11 · Q19Show mark scheme →
APrices are falling.
BThe rate of price increases is falling.
CThe real rate of interest is negative.
DThere is increased purchasing power for those on fixed incomes.
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31May / June 2021 · Paper 11 · Q20Show mark scheme →
Aa fall in the real value of debts
Ban increase in the exchange rate
Can increase in the rate of interest
Dan increase in the real purchasing power of money
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32May / June 2021 · Paper 11 · Q23Show mark scheme →
Acompany directors' real income: fell; office workers' real income: fell
Bcompany directors' real income: fell; office workers' real income: rose
Ccompany directors' real income: rose; office workers' real income: fell
Dcompany directors' real income: rose; office workers' real income: rose
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33May / June 2021 · Paper 12 · Q4Show mark scheme →
Aeconomies of scale
Bforms of competition
Cindividual demand
Dthe inflation rate
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34May / June 2021 · Paper 12 · Q19Show mark scheme →
AConsumer prices were highest in year 3.
BThe rate of inflation was 2.1% in year 4.
CThe rate of inflation was highest in year 2.
DThe rate of inflation was lowest in year 1.
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35May / June 2021 · Paper 12 · Q20Show mark scheme →
AConsumers delay spending.
BGovernments raise interest rates.
CThe level of imports increases.
DThe real value of money falls.
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36May / June 2021 · Paper 12 · Q23Show mark scheme →
Acompany directors' real income: fell; office workers' real income: fell
Bcompany directors' real income: fell; office workers' real income: rose
Ccompany directors' real income: rose; office workers' real income: fell
Dcompany directors' real income: rose; office workers' real income: rose
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37Oct / Nov 2020 · Paper 12 · Q22Show mark scheme →
Aintroducing compulsory saving for income earners
Binvesting more in building infrastructure
Cissuing more banknotes and coins
Dreducing indirect taxes
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38Oct / Nov 2020 · Paper 12 · Q23Show mark scheme →
Aby deducting the goods
Bby giving a weight to the goods
Cby taking an average of price fluctuations during a year
Dby using the price elasticity of demand for the goods
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39Oct / Nov 2020 · Paper 13 · Q22Show mark scheme →
Aintroducing compulsory saving for income earners
Binvesting more in building infrastructure
Cissuing more banknotes and coins
Dreducing indirect taxes
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40Oct / Nov 2020 · Paper 13 · Q23Show mark scheme →
Aby deducting the goods
Bby giving a weight to the goods
Cby taking an average of price fluctuations during a year
Dby using the price elasticity of demand for the goods
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41May / June 2020 · Paper 11 · Q22Show mark scheme →
Athe selection of a base year
Bthe selection of a representative range of items
Cthe calculation of average wage levels
Dthe weighting of each item in the index
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42May / June 2020 · Paper 11 · Q23Show mark scheme →
ACountries with higher inflation have higher interest rates.
BCountries with higher interest rates have lower unemployment.
CThe country with the lowest inflation had the highest unemployment.
DThe country with the lowest unemployment had the lowest inflation.
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43May / June 2020 · Paper 12 · Q22Show mark scheme →
Athe selection of a base year
Bthe selection of a representative range of items
Cthe calculation of average wage levels
Dthe weighting of each item in the index
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44May / June 2020 · Paper 12 · Q23Show mark scheme →
ACountries with higher inflation have higher interest rates.
BCountries with higher interest rates have lower unemployment.
CThe country with the lowest inflation had the highest unemployment.
DThe country with the lowest unemployment had the lowest inflation.
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45Oct / Nov 2019 · Paper 12 · Q23Show mark scheme →
Afluctuate up and down — consumers are uncertain about future price levels
Bfluctuate up and down — consumers can anticipate future price levels
Crise very rapidly — value of fixed assets remains stable
Drise very rapidly — money has limited worth as a medium of exchange
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46Oct / Nov 2019 · Paper 13 · Q23Show mark scheme →
AThey fell throughout the period.
BThey peaked in 2000.
CThey rose each year.
DThey were lower in 2014 than they were in 2010.
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47May / June 2019 · Paper 11 · Q20Show mark scheme →
APrices were higher in 2015 than in 2014.
BThe cost of living fell between 2014 and 2015.
CThe standard of living fell between 2014 and 2015.
DUgandan citizens were better off in 2015 than 2014.
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48May / June 2019 · Paper 11 · Q22Show mark scheme →
Aan increase in government spending
Ban increase in imports
Can increase in income tax rates
Dan increase in sales tax
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49May / June 2019 · Paper 12 · Q16Show mark scheme →
Aa fall in import prices
Ba fall in wage rates
Ca rise in the level of government spending
Da rise in the level of unemployment
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50May / June 2019 · Paper 12 · Q23Show mark scheme →
AJanuary: fell; March: fell
BJanuary: fell; March: rose
CJanuary: rose; March: fell
DJanuary: rose; March: rose
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51Oct / Nov 2018 · Paper 12 · Q21Show mark scheme →
Acreditors and exporters
Bcreditors and importers
Cdebtors and exporters
Ddebtors and importers
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52Oct / Nov 2018 · Paper 13 · Q21Show mark scheme →
A–5, +3, –3
B–2, –2, –2
C+2, –3, +1
D+12, +10, +3
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53May / June 2018 · Paper 11 · Q21Show mark scheme →
Athe price of a basket of goods and services
Bthe price of exports and the price of imports
Cthe value of the currency on international markets
Dthe wages of consumers
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54May / June 2018 · Paper 12 · Q21Show mark scheme →
Athe average income received by the various households
Bthe average increase in the prices of the different goods
Cthe proportion of income spent by the average household on particular goods
Dthe proportion of income that the average household saves
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55Oct / Nov 2017 · Paper 12 · Q21Show mark scheme →
Aincreased exports and increased output
Bincreased imports and increased income tax
Cincreased interest rates and increased net migration
Dincreased prices and increased employment
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56Oct / Nov 2017 · Paper 12 · Q23Show mark scheme →
Aan increase in advertising expenses for mobile phones
Ban increase in export duties on mobile phones
Can increase in income taxes on wages of employees
Dan increase in world demand for mobile phones
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57Oct / Nov 2017 · Paper 13 · Q26Show mark scheme →
AGeneva had the highest average price level.
BLiving standards were highest in Lima.
CSingapore was more expensive than Oslo.
DThe annual rate of inflation was the same in Istanbul and Johannesburg.
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58May / June 2017 · Paper 11 · Q23Show mark scheme →
Aprice level: fell; money incomes: fell
Bprice level: fell; money incomes: rose
Cprice level: rose; money incomes: unchanged
Dprice level: rose; money incomes: fell
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59May / June 2017 · Paper 12 · Q21Show mark scheme →
Aa fall in the general price level
Ba fall in the international value of a currency
Ca fall in the rate of inflation
Da fall in the real value of money
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60Oct / Nov 2016 · Paper 12 · Q20Show mark scheme →
Aa base year
Bincomes
Cprice elasticity of products
Dquantity supplied
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61Oct / Nov 2016 · Paper 12 · Q23Show mark scheme →
Aby deducting the goods and services
Bby giving a weight to the goods
Cby taking an average of price fluctuations during a year
Dby using the price elasticity of demand for the goods
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62May / June 2016 · Paper 11 · Q21Show mark scheme →
Acash holders
Bcreditors
Cdebtors
Dfixed income earners
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63May / June 2016 · Paper 11 · Q22Show mark scheme →
ACountries with higher inflation have higher interest rates.
BCountries with higher interest rates have lower unemployment.
CThe country with the lowest inflation had the highest unemployment.
DThe country with the lowest unemployment had the lowest inflation.
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64May / June 2016 · Paper 12 · Q22Show mark scheme →
ACountries with higher inflation have higher interest rates.
BCountries with higher interest rates have lower unemployment.
CThe country with the lowest inflation had the highest unemployment.
DThe country with the lowest unemployment had the lowest inflation.
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65May / June 2016 · Paper 12 · Q23Show mark scheme →
AThe product has become more expensive to produce.
BThe product has been offered for sale in more retail outlets.
CThe product has improved in quality and performance.
DThe product has taken a bigger share of consumers’ income.
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