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Economics · May / June 2022 · Paper 12 · Question 29

2281Foreign exchange rates

What is most likely to result from a reduction in the value of a country's currency if there are no other changes in the economy?

  1. AA trade in goods surplus will fall.
  2. BExport prices will rise.
  3. CImport prices will rise.
  4. DThe inflation rate will fall.

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Correct answer: C. Import prices will rise.

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