A-LevelEconomicsInternational Trade and FinanceOct/Nov 2016Paper 1 Q241 Mark
In the diagram, curves D₁D₁ and SS relate to the demand for and supply of £ sterling in the foreign exchange market. What may cause the demand curve to shift from D₁D₁ to D2D2?
Aan increase in the price of US goods sold in the UK
Ban increase in UK interest rates
Cthe development of US substitutes for UK goods
Dthe removal of UK tariffs against US goods
✓ Correct Answer
The correct answer is C: the development of US substitutes for UK goods
📋 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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