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CAIE A-Level Economics 4.6.1 Inflation, Deflation and Disinflation

Practise distinguishing a rising, falling or more slowly rising general price level from inflation-rate graphs and calculating cumulative changes across successive periods.

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • identify inflation as a rising price level, deflation as a falling level and disinflation as slower rises
  • read an inflation-rate graph to determine whether prices rose or fell in each period
  • compound successive inflation or deflation rates rather than simply adding percentage changes

4.6.1—Inflation, deflation and disinflation question 1

[Maximum number: 2]

In 2019, Russia set an aim to quicken its economic expansion - to grow faster than the world as a whole. So far, the plan is off to an uncertain start.

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This has also led to a fall in the value of the exchange rate for the Russian currency, the rouble.

Table 1.1: Russia: Government budget balance as \% of national output

Table 1.1: Russia: Government budget balance as \% of national output

Fig. 1.1: Russia's annual inflation rate, March 2015 to March 2020

Fig. 1.1: Russia's annual inflation rate, March 2015 to March 2020

Source: Trading Economics/Ministry of Finance of the Russian Federation

Question (a)

(a)

Using Fig. 1.1

[ 2 ]

Question (i)

(i)

Compare the rate of inflation in Russia in March 2015 with that in March 2020.

[ 1 ]

Question (ii)

(ii)

What has happened to the price level over this period?

[ 1 ]
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