Economics (AS & A Level) · May / June 2021 · Paper 13 · Question 25

A country has a balance of trade deficit. When will this be least likely to be improved as a result of a depreciation of its currency?

1. Aif it is currently operating with a significant amount of unused resources
2. Bif the sum of the price elasticities of demand for exports and imports is less than 1
3. Cif in the long term, the price elasticity of demand for exports should increase
4. Dif the country uses a relatively small proportion of imports in their production process

As printed in the paper