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3 marksUnemployment and Inflation

CAPE Economics Unit 2 · 2016 · Paper 2 · Question 3(a)(i)

Question 3 covers inflation and macroeconomic policies.

Define the term 'inflation' and state how it is measured.

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Other parts of this question

  1. 3(a)(ii)State FOUR challenges in measuring inflation accurately.[4 marks]
  2. 3(b)Differentiate between 'cost-push inflation' and 'demand-pull inflation'.[4 marks]
  3. 3(c)Describe TWO ways in which inflation impacts a country's balance of payments.[6 marks]
  4. 3(d)Discuss ONE positive and ONE negative effect of inflation on an economy.[8 marks]

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