Inflation falls from 7% to 2%, while a worker's nominal wage rises by 1%. Which conclusion is most accurate?
The price level falls by 5% and real wages rise
There is deflation, so the worker can buy more
Prices rise more slowly, but the worker's real wage is likely to fall
The worker's nominal and real wage both fall by 1%
30 exam-style questions on OCR GCSE Economics 3.4 Price stability, covering 3.4.1 Price stability and inflation, 3.4.2 Measuring inflation with CPI, 3.4.3 Calculate the effect of inflation, 3.4.4 Analyse inflation figures, and 3.4.5 Causes and consequences of inflation. Each one has a worked solution and a mark scheme showing where the marks go.