A-LevelEconomicsInternational economic issues9708/12 · May/June 2012 · Q291 Mark

In the diagram D₁ and S₁ are the initial supply and demand curves of the pound sterling in foreign exchange markets. [Figure 29.1] What will cause the demand curve to shift to D₂ and the supply curve to S₂?

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Adepreciation of the pound sterling

Bdecrease in UK interest rates

Can increase in the price levels of other countries

Dan increase in the level of UK import tariffs

✓ Correct answer

C: an increase in the price levels of other countries

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2012 Paper 1 Variant 2, question 29.

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