A-LevelEconomicsExchange RatesFeb/Mar 2024Paper 1 Q251 Mark
A government decides to allow the country's currency to depreciate to remove the deficit on its current account of the balance of payments. What is the most likely reason why this would not work?
AThe country gains a competitive advantage from the depreciation.
BThe country has a surplus on its capital and financial accounts.
CThe price elasticities of demand for the country's exports and imports are greater than one.
DThere are high trade barriers with the country's main trading partners.
✓ Correct Answer
The correct answer is D. 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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