CAIE A-Level Economics 4.6.4 Causes of Inflation

CAIE A-Level Economics 4.6.4 Causes of Inflation
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise separating demand-pull from cost-push inflation, drawing the appropriate AD or AS shift and evaluating wages, commodities, exchange rates, spending and policy evidence.

How this is tested

  • draw demand-pull inflation as rightward AD and cost-push inflation as leftward SRAS
  • trace wages, raw materials or depreciation through production costs to the price level
  • evaluate competing causes using timing, relative magnitude, spare capacity and economy-specific data

Question 4(a)

[Maximum number: 8]

For your economy or for one that is known to you, explain three causes of inflation and consider which of these causes is likely to be most important in 2025.