A-LevelEconomicsExchange RatesFeb/Mar 2023Paper 1 Q231 Mark
Which change affecting the foreign exchange market for the US$ would be most likely to result in a shift to the right of the demand curve and a movement along the supply curve?
AThe US government reduces subsidies on exports to the EU.
BForeign currency speculators in Switzerland believe that the US$ is undervalued and act accordingly.
CThe US government intervenes in the foreign exchange market so as to bring about a drop in the value of the US$.
DUS pharmaceutical companies experience a fall in demand for their products from the rest of the world.
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of exchange rates 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...
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