Older MCQs might not have the typical A, B, C,
D
choices. They
have choices 1, 2, 3, and a combination of them is the answer. Below is the key that maps such
combinations to the answer.
A
1, 2 and 3 are correct
B
1 and 2 only are correct
C
2 and 3 only are correct
D
1 only is correct
Economic growth, full employment/low unemployment, stable prices/low inflation, balance of payments stability, redistribution of income. Reasons behind the choice of aims and the criteria that governments set for each aim. Possible conflicts between aims: full employment versus stable prices; economic growth versus balance of payments stability; and full employment versus balance of payments stability.
Definition of inflation and deflation. Measurement of inflation and deflation using the Consumer Prices Index (CPI). Causes of inflation: demand-pull and cost-push. Causes of deflation: demand-side and supply-side. The consequences of inflation and deflation for consumers, workers, savers, lenders, firms and the economy as a whole. The range of policies available to control inflation and deflation and how effective they might be.
