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Economics · May / June 2018 · Paper 12 · Question 29

2281Foreign exchange rates

In 2015, the value of the South African currency (the rand) depreciated against the US dollar. What effect did this have on the US economy?

  1. AExports to South Africa became more expensive.
  2. BThe current account deficit of the US decreased.
  3. CThe US experienced higher levels of inflation.
  4. DUnemployment in the US decreased.

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Correct answer: A. Exports to South Africa became more expensive.

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