Which one of the following combinations of economic events is most likely, other things remaining equal, to generate both demand-pull and cost-push inflationary pressures in an economy?
A substantial rise in global energy prices, alongside a significant cut in personal income tax rates
An appreciation in the exchange rate, combined with a rise in the central bank's policy interest rate
An increase in economy-wide labour productivity, alongside a reduction in welfare benefits
A fall in global commodity prices, combined with an expansion in the government's budget surplus
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.