A-LevelEconomicsExchange RatesMay/June 2015Paper 1 Q291 Mark
In the diagram, curves D₁ and S relate to the demand for and supply of £ sterling in the foreign exchange market. [Figure 29.1] What may cause the demand curve to shift from D₁ to D2?
Adecrease in UK interest rates
Bdecrease in the price of US goods sold in the UK
Cthe removal of UK tariffs against US goods
Dthe development of UK substitutes for US goods
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of exchange rates 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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