A-LevelEconomicsInternational economic issues9708/12 · May/June 2017 · Q231 Mark

Country X conducts 60% of its trade with country Y and 40% of its trade with country Z. The initial value of the trade weighted exchange rate index of country X is 100. What will be its new trade weighted exchange rate index value if its currency rises in value by 20% against the currency of Y and falls by 10% against the currency of Z?

A84

B92

C108

D116

✓ Correct answer

C: 108

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2017 Paper 1 Variant 2, question 23.

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