A-LevelEconomicsThe macroeconomy9708/12 · May/June 2011 · Q241 Mark

Over a period of a year, the annual rate of inflation falls from 10% to 6%. Which statement is correct?

AThe cost of living has increased.

BThe purchasing power of money has increased.

CThere has been a reduction in the Retail Price Index.

DThe standard of living has increased.

✓ Correct answer

A: The cost of living has increased.

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2011 Paper 1 Variant 2, question 24.

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