A-LevelEconomicsInternational economic issues9708/12 · Oct/Nov 2018 · Q211 Mark

Between June and the end of July 2016 the UK pound sterling depreciated by 11% against a basket of currencies of the UK's major trading partners. The diagram shows the original aggregate demand curve AD1 and the original aggregate supply curve AS1 for the UK economy before June 2016. The equilibrium is at X. [Diagram] What will be the new equilibrium for the UK economy as a result of the depreciation of the pound sterling?

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

APoint A

BPoint B

CPoint C

DPoint D

✓ Correct answer

A: Point A

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Oct/Nov 2018 Paper 1 Variant 2, question 21.

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