A-LevelEconomicsThe macroeconomy9708/12 · May/June 2016 · Q211 Mark

A country experienced an annual deflation rate of 2% for four successive years. Which statement is correct for the four-year period?

AThe price level fell by 8%.

BThe price level fell by less than 8%.

CThe real value of money fell by 8%.

DThe real value of money fell by less than 8%.

✓ Correct answer

B: The price level fell by less than 8%.

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2016 Paper 1 Variant 2, question 21.

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