A-LevelEconomicsBalance of PaymentsOct/Nov 2020Paper 1 Q241 Mark
A country has a balance of payments deficit. It devalues its currency. Which combination leads to a reduction in its balance of payments deficit in the long run?
Aprice elasticity of demand for exports less than 0.5, price elasticity of demand for imports less than 0.5
Bprice elasticity of demand for exports less than 1, price elasticity of demand for imports zero (0)
Cprice elasticity of demand for exports more than 0.5, price elasticity of demand for imports more than 0.5
Dprice elasticity of demand for exports zero (0), price elasticity of demand for imports less than 1
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of balance of payments 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...
🔒
Unlock the Examiner's Answer
Sign up for free to reveal the correct answer, the official mark scheme breakdown, and the examiner trap analysis for this question.
Sign Up Free to Unlock →Join thousands of Cambridge students already using Oracle Prep