An economy is experiencing a sustained period of consumption-led economic growth, leading to a significant reduction in spare capacity.
Which one of the following is most likely to prevent this expansion from leading to a high rate of inflation?
A rise in global raw material prices and falling labour productivity
A rise in global raw material prices and rising labour productivity
A fall in global raw material prices and falling labour productivity
A fall in global raw material prices and rising labour productivity
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.