AS Economics Price Stability

The diagram shows the short-run Aggregate Supply curve of an Economy.

At which equilibrium level of national income is a reduction in the rate of interest likely to cause the greatest inflationary increase in for the economy?

• A

• B

• C

• D

What happened to the general price level over the 4 years?

• A

  Constant

  Constant

  Decreased

  Constant

• B

  Increased

  Constant

  Decreased

  Decreased

• C

  Increased

  Increased

  Increased

  Constant

• D

  Increased

  Increased

  Increased

  Decreased

In 2018, the inflation rate in Argentina was over 100%.

Which combination correctly identifies the winners and losers during this period?

• A

• B

• C

• D

What is disinflation?

• A

  a fall in output

• B

  a fall in the price level

• C

  a fall in the rate of increase in the price level

• D

  a fall in the value of the national income

What would be certain to cause a fall in a country's cost of living?

• A

  a fall in in real incomes

• B

  a fall in the inflation rate

• C

  a negative inflation rate

• D

  a reduction in direct tax levels

What would be likely to increase inflation in an economy?

• A

  an increase in consumer saving

• B

  an increase in interest rates

• C

  an increase in labour productivity

• D

  an increase in taxes on imports

The table shows the nominal GDP growth rate and annual inflation rate in four countries.

What can be concluded from the table?

• A

  W experienced the highest rate of real economic growth

• B

  X and Z experienced deflation

• C

  Y experienced the greatest rise in the standard of living

• D

  Z experienced the greatest growth in public debt

What is correct about causes of inflation?

• A

  Cost-push inflation can be caused by a rising exchange rate

• B

  Cost-push inflation can be caused by lower indirect taxes

• C

  Demand-pull inflation can be caused by a rising exchange rate

• D

  Demand-pull inflation can be caused by lower direct taxe

The diagram shows the rate of inflation over time in four countries.

Which country has a rising real value of money over time?

• A

• B

• C

• D

Which statement about a rise in the general price level in a country is correct?

• A

  It is likely to create winners and losers in the country

• B

  It is never acceptable to modern governments

• C

  It means that no goods have fallen in price

• D

  It must make the average citizen poorer