Economics (AS & A Level) · May / June 2021 · Paper 12 · Question 27

Increased international competition leads to a worsening in a country's current account balance. In the absence of any offsetting factors, how is this likely to affect the exchange rate and domestic cost-push inflation?

1. Aappreciate; decrease
2. Bappreciate; increase
3. Cdepreciate; decrease
4. Ddepreciate; increase

As printed in the paper