DP Economics Questionbank

Using the graph, determine short-run values for the unemployment rate in 2016 and the inflation rate in 2018. Enter your answers in Table 2 below.

Table 2

Calculate the rate of consumer price inflation in 2016.

Using the GDP deflator, calculate the percentage change in real GDP between 2014 and 2015.

Calculate the inflation rate for 2014 and for 2015. Enter your results in Table 1.

Explain two reasons why low and stable inflation is desirable.

Using the data in Table 1 to support your answer, identify two reasons why many economists would consider Country A’s economy to be performing poorly in 2012.

Calculate the cost of the typical basket in 2016.

The cost of the typical basket was $50 in 2017. Calculate the consumer price index (CPI) for 2017.

The consumer price index for 2014 was 101.23. Calculate the rate of inflation between 2014 and 2015 (the base year).

In 2019, nominal GDP was $102 874.55 million. Using data from Table 2, identify whether Country A experienced inflation or deflation or disinflation in 2019.

Discuss the view that the redistribution of income is the most important impact that inflation has on an economy.

Define the term inflation indicated in bold in the text (paragraph [2]).

Explain two causes of demand-pull inflation.

Explain the causes of cost-push inflation.

Discuss the view that deflation is more harmful than inflation.

Identify a period in which Country Y experienced disinflation.

Explain how rising commodity prices and wages might lead to cost-push inflation.

Discuss the possible consequences of deflation for an economy.

Using an AD/AS diagram, explain how “lower prices for food and raw materials” might put downward pressure on inflation (paragraph [1]).

Using Table 3, calculate the rate of inflation in 2017 and in 2018.

Using information from Table 1, calculate North Macedonia’s annual rates of inflation between 2016 and 2019.

Using your answer to part (b)(i), identify the year disinflation set in.

Using an AD/AS diagram, explain how the increase in the price of fuel might have contributed to inflation (Text D, paragraph [5]).