O-LevelEconomicsGovernment and the macroeconomy2281/12 · May/June 2021 · Q201 Mark

What is likely to happen when a country is experiencing deflation?

AConsumers delay spending.

BGovernments raise interest rates.

CThe level of imports increases.

DThe real value of money falls.

✓ Correct answer

A: Consumers delay spending.

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Topic: Government and the macroeconomy, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2021 Paper 1 Variant 2, question 20.

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