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?

Q: What topic does this question test?

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

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: There are high trade barriers with the country's main trading partners.

📋 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 Feb/Mar 2024 examination, Paper 1 Variant 2.

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