O-LevelEconomicsInternational trade and globalisation2281/13 · Oct/Nov 2024 · Q291 Mark
The diagram shows a change in the exchange rate for the Indian rupee against the US. [Figure 29.1 showing price of Indian rupee in US and quantity of Indian rupees with supply and demand curves S1, S2, D] What could cause the change in the exchange rate?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
Adecrease in the rate of inflation in India
Ban increase in demand for imports by people in India
Cgreater foreign direct investment into India
Dgreater purchases of its own currency by the Indian central bank
✓ Correct answer
B: an increase in demand for imports by people in India
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