A-LevelEconomicsInternational economic issues9708/33 · Oct/Nov 2019 · Q281 Mark

A small island economy imports most of its raw materials and demand for its exports is price-elastic. What would be the most likely effect of an appreciation of its currency on its balance of payments on the current account and the rate of inflation? balance of payments rate of inflation on the current account A improves falls B improves rises C worsens falls D worsens rises

(a)A small island economy imports most of its raw materials and demand for its exports is price-elastic. What would be the most likely effect of an appreciation of its currency on its balance of payments on the current account and the rate of inflation? balance of payments rate of inflation on the current account A improves falls B improves rises C worsens falls D worsens rises[1]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

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Topic: International economic issues, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source: A-Level Economics, Oct/Nov 2019 Paper 3 Variant 3, question 28.

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