O-LevelEconomicsInternational trade and globalisation2281/12 · May/June 2019 · Q281 Mark
The world demand for oil is price-inelastic and oil is paid for in US dollars. If the price of oil falls rapidly, how might it affect the exchange rate of the US dollar?
Amarket for US dollar: greater demand for US$, exchange rate for US dollar: value increases
Bmarket for US dollar: greater supply of US$, exchange rate for US dollar: value falls
Cmarket for US dollar: less demand for US$, exchange rate for US dollar: value falls
Dmarket for US dollar: less supply of US$, exchange rate for US dollar: value increases
✓ Correct answer
C: market for US dollar: less demand for US$, exchange rate for US dollar: value falls
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill International trade and globalisation and see which topics are most likely to come up next.
Sign up free →