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Economics (AS & A Level) · May / June 2021 · Paper 13 · Question 21

9708Exchange rates

A country with a fixed exchange rate experiences a higher rate of inflation than its trading partners. What is the likely effect on the country's volume of exports and imports?

  1. Adecrease / decrease
  2. Bdecrease / increase
  3. Cincrease / decrease
  4. Dincrease / increase

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Correct answer: B. decrease / increase

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