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Data response question (1)

Read the article Families feel pinch as inflation threatens economic miracle and then answer the questions below. (You can read the article in the web window below, or follow the previous link to read the article in a new web window)


Question 1

Distinguish between cost-push and demand-pull inflation.

Question 2

Using aggregate demand and supply diagrams, evaluate the extent to which the inflation taking place in China is of a cost-push nature.

Question 3

Explain the main policies that the Chinese government has been adopting to try to reduce the level of inflation.

Question 4

Discuss the extent to which growth in world food prices will affect the level of aggregate demand in China.