Table 2 shows the annual inflation rate and the annual rate of growth of the money supply for an economy between 2020 and 2023.
| Year | Inflation rate (%) | Rate of growth of money supply (%) |
|---|---|---|
| 2020 | 4.2 | 5.0 |
| 2021 | 4.8 | 4.5 |
| 2022 | 3.9 | 4.0 |
| 2023 | 3.1 | 3.2 |
From the data in Table 2, it may be concluded that, all other things being equal, there was
a continuous increase in the value of money over the entire period.
a decline in the value of money throughout the entire period.
a consistent positive relationship between the rate of inflation and money supply growth.
continuous disinflation from 2020 to 2023.
327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.