A country experiences changes in the value of its exports and imports of goods and its inflow of incomes and transfers. These are shown in the table. Which set of changes is most likely to cause a depreciation in its floating exchange rate?
✓ Correct Answer
The correct answer is B: export value: fall, import value: rise, net inflow of incomes and transfers: fall
📋 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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