A-LevelEconomicsInternational Trade and Exchange RatesFeb/Mar 2021Paper 1 Q211 Mark

A country replaces a floating exchange rate system with a managed floating exchange rate system. Which statement is correct?

Q: What topic does this question test?

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

AIts central bank would have to intervene more frequently in the foreign exchange market.

BIts central bank would need to hold fewer foreign currency reserves.

CThe value of its currency would be determined by its major trading partners.

DThe value of its currency would be determined by the value of the US dollar.

✓ Correct Answer

The correct answer is A: Its central bank would have to intervene more frequently in the foreign exchange market.

📋 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 International Trade and Exchange Rates in A-Level Economics (syllabus code 9708). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Economics Feb/Mar 2021 examination, Paper 1 Variant 2.

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