Economics 9708 · AS & A Level · Economic growth

Economic growth — practice question

(a)[8]

Explain what is meant by deflation and use aggregate demand and aggregate supply diagrams to explain how it might arise in an economy.

(b)[12]

Discuss whether a government should use monetary policy or fiscal policy to solve the problem of deflation in an economy.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Knowledge: deflation is a sustained fall in the general price level (sustained fall 1 mark, general price level 1 mark)” …

Full mark scheme, point by point
Step-by-step worked solution
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