A-LevelEconomicsInflation and DeflationOct/Nov 2010Paper 1 Q251 Mark
In Year 1 the price of a barrel of oil increased from $60 to $110. In Year 2 there was a further increase to $115 a barrel. Assume that oil price changes have an immediate impact on the general level of prices. What will be the effect of the changes in the oil price on a country's Consumer Price Index and on its inflation rate in Year 2 compared with Year 1?
Aeffect on the Consumer Price Index: decrease; effect on the rate of inflation: decrease
Beffect on the Consumer Price Index: decrease; effect on the rate of inflation: increase
Ceffect on the Consumer Price Index: increase; effect on the rate of inflation: decrease
Deffect on the Consumer Price Index: increase; effect on the rate of inflation: increase
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of inflation and deflation within the Economicssyllabus. The examiner's mark scheme requires...
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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