Economics 9708 · AS & A Level · Balance of payments

Balance of payments — practice question

(a)[8]

During 2021, year-on-year inflation in many economies rose to a level that had not been seen for fifty years. Using a diagram, explain the meaning of cost-push inflation and discuss whether this form of inflation has affected your own economy since 2021.

(b)[12]

Assess whether the possible advantages of a rising inflation rate outweigh the possible disadvantages for an economy.

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