O-LevelEconomicsInternational trade and globalisation2281/11 · May/June 2024 · Q291 Mark
In the diagram, curves D₁ and S₁ relate to the demand and supply of the US dollar ($) against the Chinese yuan. [Diagram of foreign exchange market with price of $ (in yuan) on y-axis, quantity on x-axis, D1, D2, S1, P1, P2] What is most likely to cause the demand curve for US dollars to shift from D₁ to D₂?
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.
Afall in Chinese interest rates
Bfall in US interest rates
Cfaster growth rate in the US economy
Dreduction in the US government budget deficit
✓ Correct answer
B: fall in US interest rates
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