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2.1.2 Inflation

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Question 13

An economy's inflation basket is simplified into two categories:

  • 'Housing Costs' (excluded from the Consumer Prices Index (CPI) but representing a 20% weight in the Retail Prices Index (RPI))
  • 'Other Goods and Services' (representing a 100% weight in the CPI and an 80% weight in the RPI)

In a given year, the annual price increase for 'Housing Costs' was 8.0%, and the annual price increase for 'Other Goods and Services' was 3.5%.

Based on this information, what is the percentage point difference between the RPI and CPI inflation rates?

A

0.90.90.9 percentage points

B

1.351.351.35 percentage points

C

3.63.63.6 percentage points

D

4.54.54.5 percentage points

Markscheme

2.1.2 Inflation Questions

  1. A Level
  2. /Economics
  3. /2.1.2 Inflation

53 exam-style questions on Edexcel A A Level Economics 2.1.2 Inflation. Each one has a worked solution and a mark scheme showing where the marks go.

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