Economics 2281 · O Level · Inflation and deflation

Inflation and deflation — practice question

Which changes are most likely to cause the largest increase in inflation in country X?

  • A5% decrease in demand for goods and services in country X and 5% decrease in supply of goods and services in country X
  • B5% decrease in demand for goods and services in country X and 5% increase in supply of goods and services in country X
  • C5% increase in demand for goods and services in country X and 5% decrease in supply of goods and services in country X
  • D5% increase in demand for goods and services in country X and 5% increase in supply of goods and services in country X

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