A-LevelEconomicsGovernment Macroeconomic InterventionMay/June 2022Paper 1 Q301 Mark
A country with low unemployment and a managed floating exchange rate has a persistent current account deficit on its balance of payments. Which policy to reduce this deficit is most likely to keep unemployment low, but cause inflation?
Adepreciating its currency
Bhigher direct taxation
Chigher import tariffs
Dhigher interest rates
✓ Correct Answer
The correct answer is A: depreciating its currency
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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