Economics (AS & A Level) · May / June 2022 · Paper 12 · Question 23

A country operates a fixed exchange rate system. What will put pressure on the country to devalue its currency?

1. Aa decrease in the country's inflation rate relative to the inflation rates of other countries
2. Ba decrease in the tariffs on its products imposed by other countries
3. Can increase in its current account balance of payments deficit with other countries
4. Dan increase in the country's interest rate relative to the interest rates of other countries

As printed in the paper