A-LevelEconomicsExchange RatesOct/Nov 2017Paper 1 Q221 Mark

Assume the Chinese monetary authorities are committed to maintaining the exchange rate of China's currency, the Yuan, against the US$ between P₁ and P2 on the diagram. [Figure showing supply curves S1 and S2, demand curve D, and price levels P1 and P2] What might they do if supply changed from S₁ to S2?

Q: What topic does this question test?

This question tests Exchange Rates in A-Level Economics (syllabus code 9708). It is worth 1 mark.

Aintroduce controls on Chinese investment overseas

Blower interest rates

Cremove tariffs on imports from USA

Dsell Yuan on the foreign exchange markets

✓ Correct Answer

The correct answer is A: introduce controls on Chinese investment overseas

📋 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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About This A-Level Economics Question

Topic

This multiple-choice question tests Exchange Rates in A-Level Economics (syllabus code 9708). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Economics Oct/Nov 2017 examination, Paper 1 Variant 2.

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