Skip to main content
A-LevelEconomicsInternational TradeMay/June 2014Paper 1 Q301 Mark

The US Central Bank raises its interest rate to improve its balance of payments position. The diagram shows the resulting changes in the demand for and supply of US$ in the foreign exchange market. [Figure: Foreign exchange market diagram showing exchange rate of US$ vs. quantity of US$, with curves W, X, Y, Z.] What should curves W, X, Y and Z be labelled to show the effect of the interest rate rise on the exchange rate? (Assume a change is shown by a move from a curve numbered 1 to a curve numbered 2.) [Table showing W, X, Y, Z labels for options A, B, C, D]

AW: S1, X: S2, Y: D1, Z: D2
BW: S1, X: S2, Y: D2, Z: D1
CW: S2, X: S1, Y: D1, Z: D2
DW: S2, X: S1, Y: D2, Z: D1

✓ Correct Answer

The correct answer is D. 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...

🔒

Unlock the Examiner's Answer

Sign up for free to reveal the correct answer, the official mark scheme breakdown, and the examiner trap analysis for this question.

Sign Up Free to Unlock →

Join thousands of Cambridge students already using Oracle Prep

About This A-Level Economics Question

This multiple-choice question appeared in the Cambridge A-Level Economics (9708) May/June 2014 examination, Paper 1 Variant 2. It tests the topic of International Trade and is worth 1 mark.

Oracle Prep provides AI-powered practice for all Cambridge O-Level and A-Level subjects. Our platform includes topic predictions with 87.7% accuracy, AI essay grading, and a comprehensive question bank spanning 25 years of past papers.

© 2026 Oracle Prep — The AI-Powered Cambridge Exam Engine