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IB Economics HL 3.3.4 Low and Stable Inflation Questions

Practise 3.3.4 Low and stable inflation in IB Economics HL by reviewing the concepts and applying them to marked questions.

Syllabus
First assessment 2022
Course
Economics HL
Level
HL

Exam points

  • Inflation is measured using CPI data
  • CPI has limitations as an inflation measure
  • Inflation can be demand-pull or cost-push
  • High inflation creates uncertainty, redistributive effects, saving effects, export competitiveness damage, lower growth, and inefficient allocation
  • Calculation: inflation rate from weighted CPI data

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Study 3.3.4—Low and stable inflation conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

IB Economics HL 3.3.4 Low and Stable Inflation Questions question 1

[Maximum number: 2]

The data in Table 2 refer to Kanyaland, a small, open, developing economy in 2019. All data are in billions of Kanyaland dollars (K$).

Table 2

Table 2

Table 3 shows the values of the consumer price index (CPI) between 2016 and 2020 in Kanyaland.

Table 3

Table 3

Using Table 3, calculate the rate of inflation in 2017 and in 2018.

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