(a)[2]
Using Fig. 1.1, compare the US inflation rate from July to December 2020 with that from January to June 2021.
(b)[2]
Using the information given, explain what is meant by ‘the US government’s economic stimulus package’.
(c)[4]
Consider how far an increase in interest rates could lower the rate of inflation in the US.
(d)[6]
With the aid of an AD/AS diagram, assess whether the increase in the US inflation rate has been caused by demand-side changes or supply-side changes in the economy.
(e)[6]
Assess the possible consequences of a rising inflation rate for a country such as the US.