A-LevelEconomicsExchange RatesOct/Nov 2011Paper 1 Q291 Mark
Other things being equal, what will happen if a British company raises the sterling price of goods it sells to Pakistan by the full extent of a depreciation of sterling against the rupee?
AThe demand for the company's goods will fall in Pakistan.
BThe company's earnings in Pakistan will remain constant in pounds sterling.
CThe company's earnings in Pakistan will remain constant in Pakistan rupees.
DThe profit margin on sales to Pakistan will decline.
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of exchange rates within the Economicssyllabus. The examiner's mark scheme requires...
📋 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...
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