Economics (AS & A Level) · May / June 2023 · Paper 32 · Question 26

An economy imports most of the factors of production used in the manufacture of its exported goods. What effect would depreciation of this economy's rate of exchange have?

1. Aprice of imported goods in the domestic currency: fall; price of exported goods in the domestic currency: fall
2. Bprice of imported goods in the domestic currency: fall; price of exported goods in the domestic currency: rise
3. Cprice of imported goods in the domestic currency: rise; price of exported goods in the domestic currency: fall
4. Dprice of imported goods in the domestic currency: rise; price of exported goods in the domestic currency: rise

As printed in the paper