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8 marksUnemployment and Inflation

CAPE Economics Unit 2 · 2016 · Paper 2 · Question 4(d)

The widespread use of credit cards has resulted in huge debts as people spend far more than they earn. Discuss TWO potential economic consequences of a large increase in consumer spending.

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Other parts of this question

  1. 4(a)(i)State THREE functions of money.[3 marks]
  2. 4(a)(ii)Outline TWO motives for holding money.[4 marks]
  3. 4(b)Explain TWO ways in which the fluctuating value of money affects an economy.[6 marks]
  4. 4(c)Outline TWO ways in which a surplus of money affects the money market.[4 marks]

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