Links between macroeconomic problems and their interrelatedness
10.2What the syllabus asks of you
- relationship between the internal value of money and the external value of money
- relationship between the balance of payments and inflation
- relationship between growth and inflation
- relationship between growth and the balance of payments
- relationship between inflation and unemployment: traditional Phillips curve
- relationship between inflation and unemployment: expectations-augmented Phillips curve (short- and long-run Phillips curve)
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34 questions
1May / June 2026 · Paper 31 · Q24Show mark scheme →
Aan increase in aggregate supply
Ban increase in unemployment
Cworkers become less skilled
Dworkers expect inflation to rise
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2May / June 2026 · Paper 32 · Q24Show mark scheme →
Aan increase in the natural rate of unemployment
Ba decrease in the money supply
Cthe expectation of a decrease in the inflation rate
Dan increase in the rate of interest
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3May / June 2026 · Paper 33 · Q24Show mark scheme →
Aan increase in aggregate supply
Ban increase in unemployment
Cworkers become less skilled
Dworkers expect inflation to rise
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4May / June 2026 · Paper 34 · Q25Show mark scheme →
Aa lower exchange rate
Ba lower expected rate of inflation
Can increase in government expenditure
Da rise in the level of employment
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5Oct / Nov 2025 · Paper 33 · Q19Show mark scheme →
Athe unemployment rate is above the natural rate of unemployment, decreasing inflationary expectations
Bthe unemployment rate is above the natural rate of unemployment, increasing inflationary expectations
Cthe unemployment rate is below the natural rate of unemployment, decreasing inflationary expectations
Dthe unemployment rate is below the natural rate of unemployment, increasing inflationary expectations
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6Oct / Nov 2025 · Paper 34 · Q21Show mark scheme →
Athe relationship between economic growth and employment
Bthe relationship between inequality and income per capita
Cthe relationship between inflation and unemployment
Dthe relationship between prices and national income
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7May / June 2025 · Paper 31 · Q21Show mark scheme →
Ato increase economic sustainability
Bto increase saving
Cto reduce a balance of payments deficit
Dto reduce unemployment
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8May / June 2025 · Paper 31 · Q23Show mark scheme →
Aif inflationary expectations are unchanged
Bif inflationary expectations fall
Cif labour productivity increases
Dif labour supply increases
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9May / June 2025 · Paper 31 · Q24Show mark scheme →
Aexternal value of money rises; internal value of money rises
Bexternal value of money rises; internal value of money falls
Cexternal value of money falls; internal value of money rises
Dexternal value of money falls; internal value of money falls
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10May / June 2025 · Paper 32 · Q23Show mark scheme →
Ainternal value of the currency falls; external value of the currency falls
Binternal value of the currency falls; external value of the currency rises
Cinternal value of the currency rises; external value of the currency falls
Dinternal value of the currency rises; external value of the currency rises
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11May / June 2025 · Paper 33 · Q21Show mark scheme →
Ato increase economic sustainability
Bto increase saving
Cto reduce a balance of payments deficit
Dto reduce unemployment
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12May / June 2025 · Paper 33 · Q23Show mark scheme →
Aif inflationary expectations are unchanged
Bif inflationary expectations fall
Cif labour productivity increases
Dif labour supply increases
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13May / June 2025 · Paper 33 · Q24Show mark scheme →
Aexternal value of money rises; internal value of money rises
Bexternal value of money rises; internal value of money falls
Cexternal value of money falls; internal value of money rises
Dexternal value of money falls; internal value of money falls
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14May / June 2025 · Paper 34 · Q23Show mark scheme →
Ayear 1 to year 2
Byear 2 to year 3
Cyear 3 to year 4
Dyear 4 to year 5
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15Feb / March 2025 · Paper 32 · Q20Show mark scheme →
Ainternal value of money falls; external value of money falls
Binternal value of money falls; external value of money rises
Cinternal value of money rises; external value of money falls
Dinternal value of money rises; external value of money rises
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16Oct / Nov 2024 · Paper 31 · Q22Show mark scheme →
AF to G to H
BF to G to K
CF to J to H
DF to J to K
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17Oct / Nov 2024 · Paper 32 · Q23Show mark scheme →
AThe data are entirely consistent with the theory of the Phillips curve.
BThe data prove conclusively that the Phillips curve theory does not operate.
CThe data suggest that no conclusions can be reached about the validity of the Phillips curve theory.
DThe data suggest that the theory of the Phillips curve is correct, though with time lags.
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18Oct / Nov 2024 · Paper 33 · Q21Show mark scheme →
AAny attempt to reduce unemployment will increase inflation.
BIncreased inflation actually increases unemployment.
CIncreased inflation leads to expectations of further inflation.
DIncreased inflation reduces real wage rates, which increases the demand for labour.
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19May / June 2024 · Paper 31 · Q20Show mark scheme →
A2019
B2020
C2021
D2022
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20May / June 2024 · Paper 31 · Q21Show mark scheme →
AJ to K to L
BL to K to J
CM to K to J
DM to K to L
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21May / June 2024 · Paper 32 · Q23Show mark scheme →
Aan improvement in the current account balance
Ban increase in price competitiveness
Can increase in export revenue
Dan increase in import expenditure
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22May / June 2024 · Paper 33 · Q20Show mark scheme →
A2019
B2020
C2021
D2022
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23May / June 2024 · Paper 33 · Q21Show mark scheme →
AJ to K to L
BL to K to J
CM to K to J
DM to K to L
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24Oct / Nov 2023 · Paper 31 · Q26Show mark scheme →
AAustralia and Japan
BAustralia only
CJapan only
DCanada and the United States
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25Oct / Nov 2023 · Paper 32 · Q21Show mark scheme →
ACanada and Germany
BCanada only
CFrance and Japan
DFrance only
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26Oct / Nov 2023 · Paper 33 · Q22Show mark scheme →
Athe rate of change of real wages
Bthe rate of change of take-home pay
Cthe rate of inflation
Dthe rate of interest
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27Oct / Nov 2022 · Paper 13 · Q30Show mark scheme →
Alower price inflation; lower exchange rate
Bmore consumer spending; lower interest rates
Cmore equal incomes; lower indirect tax rate
Dreduced import levels; smaller trade quotas
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28Oct / Nov 2022 · Paper 31 · Q28Show mark scheme →
AKuznets curve
BLaffer curve
CLorenz curve
DPhillips curve
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29Oct / Nov 2022 · Paper 32 · Q30Show mark scheme →
Avertical axis: inflation rate; horizontal axis: unemployment level
Bvertical axis: inflation rate; horizontal axis: unemployment rate
Cvertical axis: price level; horizontal axis: unemployment level
Dvertical axis: price level; horizontal axis: unemployment rate
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30May / June 2022 · Paper 31 · Q30Show mark scheme →
AFalling inflation leads to lower unemployment.
BIncreasing inflation leads to rising unemployment.
CThe rate of inflation correlates exactly with the rate of unemployment.
DThe rate of inflation has a marginal effect on the rate of unemployment.
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31May / June 2022 · Paper 33 · Q30Show mark scheme →
AFalling inflation leads to lower unemployment.
BIncreasing inflation leads to rising unemployment.
CThe rate of inflation correlates exactly with the rate of unemployment.
DThe rate of inflation has a marginal effect on the rate of unemployment.
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32Oct / Nov 2021 · Paper 33 · Q29Show mark scheme →
A2010–2011
B2011–2012
C2012–2013
D2013–2014
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33May / June 2021 · Paper 31 · Q28Show mark scheme →
AHigh inflation and high unemployment are undesirable in a properly-functioning economy.
BIncreased government spending on investment projects will always crowd out private investment.
CThe best way for an economy to get out of a recession is for the government to increase its expenditure.
DThe most effective way to reduce inflation is for the government to exercise tight control over the money supply.
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34Feb / March 2021 · Paper 32 · Q29Show mark scheme →
Aan accelerating rate of inflation
Ba diminishing rate of inflation
Ca high but constant rate of inflation
Da negative rate of inflation
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