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Cambridge IGCSE Economics practice

Paper 2 structured question: Inflation and deflation

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Inflation and deflation

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Paper 2Structured Questions2 marks

The economy is facing deflation.

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Impact of Deflation

Deflation can lead to lower prices, but it may also cause consumers to delay spending, affecting businesses negatively.

  1. a

    Discuss the effects of deflation on consumers and businesses.

    Aim for approximately 2 distinct marking points.

    [2]

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Paper 2 structured question: Inflation and deflation

Paper 2Structured Questions2 marks

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Impact of High Inflation

High inflation affects various economic groups differently. Consumers face rising prices, workers demand higher wages, and businesses may struggle with increased costs.

  1. a

    Explain the impact of high inflation on consumers and workers.

    Aim for approximately 2 distinct marking points.

    [2]