Economics 0455 · IGCSE · Inflation and deflation

Inflation and deflation — practice question

A government aims to keep inflation within the range of $2\%$ to $3\%$. The diagram illustrates the inflation rate across a four-year period. What can be deduced from the diagram?

  • AThe government target was missed in two years.
  • BThe price level fell in two years.
  • CThe price level was at its highest in the first year.
  • DThe real value of money fell in three years.

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