DP Economics Questionbank

Explain the causes of cost-push inflation.

Explain two causes of demand-pull inflation.

Evaluate the effectiveness of interventionist supply-side policies in reducing demand-pull inflation.

Explain why a high rate of inflation may negatively affect both a country’s export competitiveness and the level of capital investment by firms.

Discuss the view that the use of monetary policy is always the best way to reduce inflation.

Discuss whether an increase in interest rates is the most effective way of reducing the rate of inflation in an economy.

Evaluate the effectiveness of using monetary policy to reduce the rate of inflation.

Explain the factors that cause demand-pull and cost-push inflation.

The government in Country Alpha reduces income taxes in 2019.
Using information from the graph to support your answer, explain the likely effect on the inflation rate and the unemployment rate.

Calculate the total welfare loss resulting from the imposition of the tariff on chia seeds.

Evaluate the view that inflationary pressures in an economy are best reduced using supply-side policies.

Using an AD/AS diagram, explain how Turkey’s reliance on energy imports is putting “further pressure on inflation” (paragraph [4]).