A-LevelEconomicsInternational TradeMay/June 2011Paper 1 Q291 Mark
The diagram shows the exchange rate for the UK£ in terms of the US$. The original exchange rate is at E. What will be the new exchange rate equilibrium of the UK£ following a reduction in UK interest rates and a rise in US interest rates?
AThe point A on the diagram.
BThe point B on the diagram.
CThe point C on the diagram.
DThe point D on the diagram.
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of international trade 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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