A-LevelEconomicsExchange RatesOct/Nov 2020Paper 1 Q261 Mark

The government of an open economy with an overvalued currency decides to abandon its fixed exchange rate in favour of a floating exchange rate. Which macroeconomic policy aim is least likely to be met because of this change?

Q: What is the correct answer to this A-Level Economics question?

The correct answer is A: low inflation rate.

Q: What topic does this question test?

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

Alow inflation rate

Blow level of unemployment

Creduced balance of payments deficit

Dsustainable rate of economic growth

✓ Correct Answer

The correct answer is A: low inflation rate

📋 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 2020 examination, Paper 1 Variant 2.

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