Economics 9708 · AS & A Level · Balance of payments

Balance of payments — practice question

Which statement concerning inflation is accurate?

  • ACost-push inflation is likely to occur when the government increases its expenditure.
  • BDemand-pull inflation is likely to occur when the country’s exchange rate appreciates.
  • CThe Quantity Theory of Money predicts that changes in money supply can cause inflation.
  • DWhen inflation is unanticipated real values remain unchanged.

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