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Subjects · Leaving Cert Economics

Leaving Cert Economics: Inflation & the CPI

How often Inflation & the CPI comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

OL Asked on 4 of the last 5 Ordinary Level papers, most recently in 2025. most years

Inflation & the CPI, Higher Level(7 marks)

Quick ones on Inflation & the CPI.

(a)Inflation is best defined as…
  1. A one-off rise in the price of a single good
  2. A sustained rise in the general price level
  3. A fall in the value of GDP over a year
(b)Inflation caused by rising energy and wage costs is…
  1. Deflation
  2. Demand-pull inflation
  3. Cost-push inflation
(c)The inflation rate falls from 6% to 2%. What is happening to prices?
  1. They still rise, but more slowly
  2. They are unchanged from last year
  3. They are falling, but more slowly
Show the answers

(a) A sustained rise in the general price level

(b) Cost-push inflation

(c) They still rise, but more slowly

Your turn: Higher Level questions on Inflation & the CPI.

Higher Level

Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

Every paper, year by year

YearWhere it came up
2025Q4, Q15
2024Q12
2023Q15
2022Q14
2021Q14

Links open the State Examinations Commission’s paper for that year.

More Inflation & the CPI questions

Inflation & the CPI, 3 marks

Why can deflation harm an economy?

  1. It raises the price of imported goods
  2. It reduces the real value of the debts people owe
  3. Buyers delay spending, expecting lower prices
Show the answer

Buyers delay spending, expecting lower prices

Waiting for lower prices cuts demand, so firms cut output and jobs. Deflation also raises, not reduces, the real burden of existing debts.

Inflation & the CPI, 3 marks

The CPI rises from 125 to 130. What is the rate of inflation?

  1. 3.8%
  2. 4%
  3. 5%
Show the answer

4%

Inflation = (130 − 125) ÷ 125 × 100 = 4%. A 5-point rise is not 5% because the base is 125, not 100. 3.8% wrongly divides by 130.

Inflation & the CPI, 2 marks

Which price index is used to compare inflation across EU countries?

  1. Harmonised Index of Consumer Prices (HICP)
  2. Residential Property Price Index (RPPI)
  3. Human Development Index (HDI)
Show the answer

Harmonised Index of Consumer Prices (HICP)

The HICP uses the same method in every EU country so rates can be compared. The ECB's inflation aim is defined using the euro-area HICP.

Ordinary Level

Asked on 4 of the last 5 Ordinary Level papers, most recently in 2025. most years

Every paper, year by year

YearWhere it came up
2025Q1, Q16
2024Q13
2023Not asked
2022Q16
2021Q13

Links open the State Examinations Commission’s paper for that year.

More Inflation & the CPI questions

Inflation & the CPI, 2 marks

Inflation is?

  1. A rise in the price of one good or service
  2. A fall in the general price level over time
  3. A sustained rise in the general price level
Show the answer

A sustained rise in the general price level

Inflation means prices on average keep rising over time, so each euro buys less. A rise in one price on its own is not inflation.

Inflation & the CPI, 2 marks

In Ireland, inflation is measured by the?

  1. Herfindahl-Hirschman Index
  2. Consumer Price Index (CPI)
  3. Live Register
Show the answer

Consumer Price Index (CPI)

The CSO tracks the prices of a basket of goods and services that households buy. The percentage change in the CPI is the rate of inflation.

Inflation & the CPI, 3 marks

The CPI was 100 in the base year and 106 one year later. Inflation was?

  1. 6%
  2. 106%
  3. 0.6%
Show the answer

6%

% change = (106 - 100) ÷ 100 × 100 = 6%. An index of 106 means prices are 6% higher than in the base year.

Other Economics topics

All of Leaving Cert Economics