Gce Model Questions Vol1 2019 Economics Question 9

Practice essay / theory question 9 from the 2019 Gce Model Questions Vol1 Economics examination. This question covers Inflation .

Gce Model Questions Vol1 2019 Economics Essay / Theory

Topic: Inflation

Question 9 GCE_MODEL_QUESTIONS_VOL1 • 2019 • ECONOMICS • essay

The economy of Nigeria has been experiencing varying rates of inflation over the past five years.

Question Parts

( a )

Explain the difference between demand‑pull and cost‑push inflation, giving one real‑life example of each that could be relevant to Nigeria.

( b )

Using the Phillips curve framework, discuss how a persistent rise in inflation expectations can affect the unemployment rate in the short run and the long run. Include in your answer the role of monetary policy.

( c )

The Central Bank of Nigeria (CBN) is considering two policy options to curb inflation: (i) raising the policy interest rate by 2 percentage points, and (ii) implementing a targeted subsidy on staple foods. Evaluate the likely effectiveness of each option in reducing inflation, and discuss possible unintended consequences on output and employment.

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About This Question

This is Gce Model Questions Vol1 2019 Economics Question 9. It is one of the essay questions from the 2019 Gce Model Questions Vol1 Economics examination.

The question covers Inflation .

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