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Cambridge IGCSE Economics practice

Paper 2 structured question: Inflation and deflation

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2

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Inflation and deflation

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Paper 2Structured Questions2 marks

The economy is experiencing high inflation rates.

Description

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]

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Paper 2 structured question: Inflation and deflation

Paper 2Structured Questions2 marks

Description

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]