Economics (AS & A Level) · May / June 2021 · Paper 11 · Question 22

Why might a government wish to increase the value of its foreign exchange rate when the sum of the price elasticity of demand for imports and exports is greater than 1?

1. Ato attract more tourists into the country
2. Bto improve the current account of the balance of payments in the long run
3. Cto increase inflation if the country is in recession
4. Dto make imported raw materials cheaper

As printed in the paper