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2.3 Economic performance

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Question 128

A sustained period of deflation within a domestic economy is most likely to lead to:

A

an increase in the real value of outstanding debt for borrowers.

B

a decrease in real interest rates when nominal interest rates are at the zero lower bound.

C

an increase in aggregate demand as consumers rush to purchase goods before prices fall further.

D

a redistribution of real wealth from creditors to debtors.

Markscheme

2.3 Economic performance Questions

  1. A Level
  2. /Economics
  3. /2.3 Economic performance

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.

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