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Economics (AS & A Level) · Feb / March 2025 · Paper 12 · Question 27

9708Exchange rates

When is a country's exchange rate most likely to fall?

  1. AWhen its current account surplus exceeds that of its trading partners.
  2. BWhen its inflation rate exceeds that of its trading partners.
  3. CWhen its interest rate exceeds that of its trading partners.
  4. DWhen its unemployment rate exceeds that of its trading partners.

As printed in the paper

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Correct answer: B. When its inflation rate exceeds that of its trading partners.

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