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Economics · May / June 2016 · Paper 12 · Question 30

2281Foreign exchange rates

The US currently trades in oil with the UK. The discovery of new oil and gas deposits in the US will mean that its oil imports decrease and its oil exports increase. From the initial equilibrium point of X, which letter indicates the new equilibrium point for the US exchange rate?

  1. AA
  2. BB
  3. CC
  4. DD

As printed in the paper

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Correct answer: B. B

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