Inflation

Evaluate the possible conflicts between macroeconomic objectives when seeking to control inflation.

Case study · The cost of living in the UK

Evaluate the microeconomic and macroeconomic effects of high levels of inflation. Refer to the UK or any other developed economy in your answer.

Case study · UK living standards and supply-side policies

Evaluate the possible causes of inflation in the UK.

Evaluate macroeconomic policies, apart from monetary policy, the UK government could use to reduce inflation.

Case study · Changes in the nature of UK towns and cities

Evaluate the microeconomic and macroeconomic effects of labour shortages in the UK, or a developed economy of your choice.

Case study · UK balance of trade and inflation

Evaluate how interest rates are used to control UK inflation.

Case study · Mozambique

Evaluate the likely microeconomic and macroeconomic effects of relatively high inflation rates in many African countries.

Case study · UK inflation and economic growth

Evaluate the use of interest rate changes as a means of controlling UK inflation.

Case study · The UK economy

Evaluate the likely impact of high inflation on the UK government’s macroeconomic objectives.

Evaluate the likely macroeconomic consequences of a significant fall in global oil prices.

Case study · The UK economy

With reference to Extract B, discuss the use of quantitative easing in preventing deflation.

Case study · UK monetary policy since the Global Financial Crisis of 2008

With reference to Figure 1, explain the term ‘inflation rate’.

Case study · UK monetary policy since the Global Financial Crisis of 2008

Assess the likely impact of an increase in real wages on the UK economy. Use an aggregate demand and aggregate supply diagram in your answer.

Diagram needed. Open the original question paper for the diagram ↗

Case study · UK monetary policy since the Global Financial Crisis of 2008

Explain one reason why ‘the fall in the exchange rate of the British pound’ (Extract A, line 21) is likely to increase inflation.

Case study · The UK economy

Examine two reasons for the rise in inflation in the UK. Refer to the information provided in your answer.

Case study · UK balance of trade and inflation

With reference to Figure 2, explain how the CPI inflation rate is measured. Refer to the concept of weights in your answer.

Case study · UK balance of trade and inflation

With reference to Extract B, explain two reasons for the increase in the rate of UK inflation.

Case study · UK balance of trade and inflation

Discuss the likely economic effects of the high rate of UK inflation on consumers and workers.

Case study · Hand car wash (HCW) firms in the UK

Examine two reasons why the demand for HCWs increases during a period when consumer ‘incomes fail to keep up with inflation’ (Extract A line 8).

Case study · UK inflation and economic growth

With reference to the first paragraph of Extract A and Figure 1, explain how the change in the exchange rate of the pound has ‘contributed to rising inflation’ (Extract A, line 4).

Case study · UK inflation and economic growth

With reference to Extract A, explain two likely economic effects of the higher rate of UK inflation.

Case study · UK inflation and economic growth

With reference to the last paragraph of Extract A and Figure 2, explain one reason why it is necessary to regularly update the CPI basket of goods and services.

Case study · The Eurozone economy

With reference to the information provided and your own knowledge, examine two factors which might explain the change in the rate of Eurozone inflation as shown in Figure 2.

Case study · UK incomes, inflation and monetary policy

With reference to the data, explain two likely reasons for the UK’s falling inflation rate.

Case study · UK incomes, inflation and monetary policy

With reference to Extracts A and B and your own knowledge, discuss whether the MPC should be concerned about the risk of deflation in the UK economy.

Explain one likely impact of a decrease in the base interest rate on inflation.

Explain one limitation of CPI in measuring the rate of inflation.

Define the term ‘inflation’.

Explain one likely cause of inflation.

Explain one possible link between an increase in credit card lending and the rate of inflation.

Define the term ‘price level’.

Define the term ‘index number’.

With reference to the data provided, explain the process of calculating the rate of inflation in the UK using the Consumer Prices Index. Refer to the concept of weights in your answer.

Calculate the percentage change in the UK Consumer Prices Index from September 2014 to September 2015. You are advised to show your working.

Define the term ‘deflation’.

Which one of the following can be inferred from the above chart? Between 2007 and 2019,

Which one of the following can be deduced from the chart?

From the above data, it can be deduced that the percentage point difference between CPI and RPI was:

Which one of the following statements is correct about the UK’s inflation record between September 2011 and January 2013? Based on the data shown, the UK experienced:

Which one of the following is most likely to be a cause of deflation? A fall in: