Cambridge International (CAIE) · 4 The macroeconomy (AS) · 4.6 Price stability

Cambridge International (CAIE) Economics past paper questions: Price stability

Every Cambridge International (CAIE) question on Price stability from 2023 to 2025: 4 essays, 7 data response questions and 13 multiple choice questions. It covers 5.3 Monetary policy, 4.1 National income statistics, 6.4 Exchange rates, 3.2 Methods and effects of government intervention in markets and 4.3 Aggregate demand and aggregate supply analysis. Each question links to its paper, mark scheme and examiner report.

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Subtopics5.3 Monetary policy 24.1 National income statistics 16.4 Exchange rates 13.2 Methods and effects of government intervention in markets 14.3 Aggregate demand and aggregate supply analysis 12.4 The interaction of demand and supply 1

Essay questions on price stability

AS Paper 2, November 2025, Q5(b)OptionalAssess12 marks

Assess the view that the effects of a high rate of inflation are always more damaging for consumers than for firms.

Question paper p.4 Mark scheme p.24 Open in the tool Practise the AD/AS diagram

AS Paper 2, June 2025, Q4(a)OptionalExplain8 marks

With the help of an AD/AS diagram(s), explain one demand-side and one supply-side cause of deflation and consider which is likely to be more damaging to an economy.

Question paper p.4 Mark scheme p.18 Open in the tool Draw it: AD/AS diagram

AS Paper 2, November 2023, Q5(b)OptionalAssess12 marks

Assess whether the internal effects of inflation are more serious than the external effects of inflation for an economy.

Question paper p.4 Mark scheme p.19 Examiner report p.12 Open in the tool Practise the AD/AS diagram

AS Paper 2, June 2023, Q5(a)OptionalExplain8 marks

Explain the difference between cost‑push and demand‑pull inflation and consider which is more likely to occur if there is a depreciation in the exchange rate of a country with few natural resources.

Question paper p.5 Mark scheme p.20 Examiner report p.12 Open in the tool Practise the AD/AS diagram

Data response questions on price stability

AS Paper 2, June 2024, Q1(a)Describe2 marks

Case study: Dilemma for the European Central Bank (ECB)

Describe what has happened to consumer prices in the Eurozone between March 2021 and February 2022.

Question paper p.3 Mark scheme p.7 Open in the tool

AS Paper 2, June 2024, Q1(b)Identify2 marks

Case study: Dilemma for the European Central Bank (ECB)

With the help of an aggregate demand and aggregate supply diagram, identify the main type of inflation in the Eurozone.

Question paper p.3 Mark scheme p.7 Open in the tool Draw it: AD/AS diagram

AS Paper 2, June 2024, Q1(c)Consider4 marks

Case study: Dilemma for the European Central Bank (ECB)

Consider the extent to which the shortage of supply of labour in the Eurozone may have contributed towards the increasing rate of inflation.

Question paper p.3 Mark scheme p.7 Open in the tool

AS Paper 2, June 2023, Q1(c)Consider4 marks

Case study: Is Nigeria being held back by its dependence on oil and gas?

Consider the extent to which the removal of fuel subsidies in Nigeria would lead to an increase in inflation.

Question paper p.3 Mark scheme p.7 Examiner report p.9 Open in the tool

AS Paper 2, March 2023, Q1(a)Compare2 marks

Case study: Inflation in the United States (US)

Using Fig. 1.1, compare the US inflation rate between July and December 2020 with that between January and June 2021.

Question paper p.3 Mark scheme p.8 Examiner report p.3 Open in the tool

AS Paper 2, March 2023, Q1(d)Assess6 marks

Case study: Inflation in the United States (US)

With the help of an AD/AS diagram, assess whether the rising inflation rate in the US has been caused by changes to the demand side or changes to the supply side of the economy.

Question paper p.3 Mark scheme p.9 Examiner report p.3 Open in the tool Draw it: AD/AS diagram

AS Paper 2, March 2023, Q1(e)Assess6 marks

Case study: Inflation in the United States (US)

Assess the possible consequences of a rising rate of inflation for a country such as the US.

Question paper p.3 Mark scheme p.10 Examiner report p.3 Open in the tool

Multiple choice questions

AS Paper 1, June 2025, Q16
Price stability can be said to occur if the measured value of the consumer prices index (CPI) is unchanged during the year. Which statement is correct?
AS Paper 1, March 2025, Q16
Governments may have price stability as a macroeconomic objective. What is meant by price stability?
AS Paper 1, November 2024, Q15
The table shows the values of Consumer Prices Index (CPI) and a worker’s salary in 2022 and What is the real value of the worker’s salary in 2023 compared with 2022?
AS Paper 1, November 2024, Q19
In an economy with an interest rate of 4% per annum, the rate of inflation falls from 5% to 3% per annum. What will be a benefit of this fall?
AS Paper 1, June 2024, Q16
The table gives the value of the price index of an economy in two years. What can be concluded about the period?
AS Paper 1, June 2024, Q17
What causes a rise in cost-push inflation?
AS Paper 1, March 2024, Q16
What is least likely to cause a simultaneous increase in demand-pull and cost-push inflation?
AS Paper 1, November 2023, Q21
Which combination is possible for an economy experiencing zero inflation?
AS Paper 1, November 2023, Q22
The graph shows the rate of inflation in Japan from April 2020 to February 2021. Over which period did disinflation occur in Japan?
AS Paper 1, June 2023, Q24
If a country is experiencing a period of high inflation, which groups will benefit the most from this?
AS Paper 1, March 2023, Q15
A government is faced with rising inflation. It wishes to reduce inflationary pressure while avoiding a fall in output. Which action is most likely to meet its needs?
AS Paper 1, March 2023, Q19
The graph shows a country’s average annual inflation rate over a five-year period. What can be concluded about the general price level during the five years?
AS Paper 1, March 2023, Q20
In an economy, wages and prices are both rising but wages are rising faster. Which features are likely to exist in this economy?

Question text is quoted from the question papers, © Cambridge University Press & Assessment (UCLES), for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Essay questions on price stability

Data response questions on price stability

Multiple choice questions

More Cambridge International (CAIE) topics: 4 The macroeconomy (AS)