Economics 0455 · IGCSE · Inflation and deflation

Inflation and deflation — practice question

The diagram illustrates percentage (%) changes in prices and wages across time. What information does the diagram show?

  • AInflation is proportionately related to wage levels.
  • BThe gap between wages and prices is constant.
  • CWages are highest in 2010.
  • DWage earners have increasingly less purchasing power.

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