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Policies to control inflation and deflation
Practice Questions

20 CIE IGCSE Economics questions on Policies to control inflation and deflation, each with instant feedback and a full examiner-style mark scheme.

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Try 2 sample questions on Policies to control inflation and deflation

Question 1 · 1 mark · Difficulty 1/3

Which policy measure would a central bank most likely use to reduce demand-pull inflation?

  1. Decrease the rate of interest
  2. Increase the rate of interest
  3. Increase government spending
  4. Reduce income tax rates
Show answer & explanation
✓ Answer: B — Increase the rate of interest
Award 1 mark for identifying that higher interest rates reduce borrowing and consumer spending, thereby reducing aggregate demand and demand-pull inflation. A is incorrect — decreasing interest rates would increase borrowing and spending, worsening inflation. C is incorrect — increased government spending would raise aggregate demand. D is incorrect — reducing income tax would increase disposable income and spending.
Question 2 · 1 mark · Difficulty 2/3

In 2022, Country X experienced deflation with falling prices and rising unemployment. The government decided to use fiscal policy to address this situation. Which combination of fiscal policy measures would be most appropriate?

  1. Increase taxes and reduce government spending
  2. Reduce taxes and increase government spending
  3. Increase taxes and increase government spending
  4. Reduce taxes and reduce government spending
Show answer & explanation
✓ Answer: B — Reduce taxes and increase government spending
Award 1 mark for identifying expansionary fiscal policy as appropriate for deflation. Reducing taxes increases disposable income and consumption; increasing government spending directly raises aggregate demand. A is incorrect — this is contractionary fiscal policy, which would worsen deflation. C is incorrect — the effects would partially cancel out. D is incorrect — reducing government spending would decrease aggregate demand.
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20 questions · 25 min · free

CIE IGCSE Economics: Policies to control inflation and deflation FAQ

How many CIE IGCSE Economics questions on Policies to control inflation and deflation are there on Kramizo?
Kramizo currently has 20 exam-board-aligned practice questions on Policies to control inflation and deflation for CIE IGCSE Economics, with new questions added every week. Each question gives you instant feedback and a full examiner-style mark scheme that tells you exactly what would earn marks on a real CIE paper. The questions span the full difficulty range — from straightforward recall (level 1) right up to multi-step reasoning and evaluation (level 3) — so the bank works for first-pass revision and final exam-week stress testing alike.
Is Kramizo free for CIE IGCSE students preparing for Economics?
Yes — completely free. Every student gets 45 questions a day on the free plan, with no card required and no trial countdown. That free quota works across every subject and every topic in our bank, so you can mix Policies to control inflation and deflation practice with other Economics topics or even switch to a totally different CIE subject without paying anything. Kramizo's optional Pro plan removes the daily cap and adds detailed progress analytics, but the free tier is the real product — used by thousands of GCSE, IGCSE and CSEC students.
Are the Policies to control inflation and deflation questions aligned to the official CIE IGCSE Economics syllabus?
Every question is written against the published CIE IGCSE Economics specification, including the exact command words (state, describe, explain, calculate, evaluate, etc.), mark allocations, and difficulty tier you'd see on a real CIE paper. Explanations are written in the style of official examiner mark schemes — they tell you what is being awarded marks and why distractors are wrong, not just whether you got it right. The bank is continually refined to match the latest syllabus updates from CIE.
How is Policies to control inflation and deflation typically tested on CIE IGCSE Economics papers?
Policies to control inflation and deflation appears across multiple question types on real CIE IGCSE Economics papers — most commonly as multiple-choice questions in the objective section, structured short-answer questions in the main paper, and occasionally as part of an extended response. Kramizo's practice bank reflects that mix: 4-option MCQs, true/false statements, fill-in-the-blank key terms, multi-select questions, and ordering questions. Working through the bank gives you exposure to every question style examiners actually use.

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