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Economics · Oct / Nov 2025 · Paper 12 · Question 29

2281Foreign exchange rates

Which combination of changes in export revenue and import expenditure is most likely to cause a country's exchange rate to depreciate?

  1. Aexport revenue: decreases; import expenditure: decreases
  2. Bexport revenue: decreases; import expenditure: increases
  3. Cexport revenue: increases; import expenditure: decreases
  4. Dexport revenue: increases; import expenditure: increases

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Correct answer: B. export revenue: decreases; import expenditure: increases

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