Economics · May / June 2024 · Paper 12 · Question 29

The table shows the average exchange rate of the UK pound (£) to the US dollar ($), that is the amount of $ that can be bought with £1. | year | exchange rate UK£ / US$ | |---|---| | 1 | 1.64 | | 2 | 1.52 | | 3 | 1.35 | | 4 | 1.25 | What is a likely effect of this change on the UK economy?

1. Adecreased cost-push inflation
2. Bdecreased current account deficit
3. Cincreased quantity of imports
4. Dincreased trade deficit

As printed in the paper