A-LevelEconomicsThe macroeconomy9708/12 · Oct/Nov 2022 · Q211 Mark

Which effect of inflation is described as redistributive?

Athe improvement in the terms of trade

Bthe deterioration in the balance of trade

Cthe inconvenience of frequently changing prices

Dthe loss of purchasing power for people on fixed incomes

✓ Correct answer

D: the loss of purchasing power for people on fixed incomes

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Oct/Nov 2022 Paper 1 Variant 2, question 21.

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