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3 marksUnemployment and Inflation

CAPE Economics Unit 2 · 2021 · Paper 2 · Question 2(b)(iii)

Explain the given statements.

In Country M, the consumer price index (CPI) in 2017 was 110 and in 2018 it was 120. Determine the rate of inflation across the two years.

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Other parts of this question

  1. 2(a)List FOUR instruments of monetary policy.[4 marks]
  2. 2(b)(i)Explain the statement: 'Cigarettes are not generally considered as money.'[3 marks]
  3. 2(b)(ii)Explain the statement: 'John has just graduated and is looking for a job. However, John's situation is not considered a case of cyclical unemployment.'[3 marks]
  4. 2(c)With the aid of a diagram representing the market for loanable funds, discuss 'crowding out'.[12 marks]

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