Between January 2022 and January 2023 Turkey's annual rate of inflation increased by nine percentage points. Evaluate possible causes of inflation. Refer to a country of your choice in your answer.

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance.
The indicative content below exemplifies some of the points that candidates may make, but this does not imply that any of these must be included. Other relevant points must also be credited.

Knowledge, Application and Analysis (12 marks) - indicative content
- Understanding of inflation
- "Between January 2022 and January 2023 Turkey's inflation rate increased by nine percentage points"
Possible causes include:
- Increase in AD (Demand-pull) as a result of -
- higher consumption/lower savings
- higher levels of gross/net investment
- higher government spending/public expenditure
- higher net trade/increase in exports/fall in imports
- Reflationary policies increasing AD as a result of
- fiscal policy and/or monetary policy
- excessive growth of money supply e.g. through QE
- Decrease in SRAS (Cost-push) as a result of -
- increase in indirect taxes
- rise in costs of raw materials and energy
- decrease in the external value of the currency making imports relatively more expensive
- Decrease in LRAS as a result of -
- weak competition policy
- decrease in productivity
- decrease in net migration
- lack of technological advancements
- no improvements in education and skills

Credit use of relevant AD/AS diagrams
NB Award a maximum of Level 3 for answers with no reference to a country in their answer
Evaluation (8 marks) - indicative content
- Significance of the most important factor changes over time
- It is likely to be a combination of factors contributing to inflation
- Magnitude of the inflation will be dependent on the size of any shifts in AD and AS: it is likely to be relatively large for Turkey
- Demand-pull inflation (increase in AD) is not often seen as negative as the increase in AD can be controlled by monetary policy
- Fiscal policy and/or monetary policy takes time to impact AD
- Cost-push inflation (decrease in SRAS) is often seen as more negative as central banks have very limited tools to control it
- If the external value of the currency increases then the relative price of imports will decrease
- Prices of raw materials and oil are highly volatile and likely to decrease as global supply increases
- Supply-side impacts (decrease in LRAS) are likely to have a very long-term effect only causing inflation after a significant time lag
Evaluation (8 marks) - indicative content
- Significance of the most important factor changes over time
- It is likely to be a combination of factors contributing to inflation
- Magnitude of the inflation will be dependent on the size of any shifts in \(A D\) and \(A S\) : it is likely to be relatively large for Turkey
- Demand-pull inflation (increase in AD) is not often seen as negative as the increase in AD can be controlled by monetary policy
- Fiscal policy and/or monetary policy takes time to impact AD
- Cost-push inflation (decrease in SRAS) is often seen as more negative as central banks have very limited tools to control it
- If the external value of the currency increases then the relative price of imports will decrease
- Prices of raw materials and oil are highly volatile and likely to decrease as global supply increases
- Supply-side impacts (decrease in LRAS) are likely to have a very long-term effect only causing inflation after a significant time lag