Economics (AS & A Level) · Oct / Nov 2025 · Paper 12 · Question 28

Between June and the end of July 2016, the UK pound sterling depreciated by 11% against a basket of currencies of the UK's major trading partners. The diagram shows the original aggregate demand curve AD1 and the original aggregate supply curve AS1 for the UK economy before June 2016. The equilibrium is at X. What would have been the new equilibrium for the UK economy as a result of the depreciation of the pound sterling?

1. AA
2. BB
3. CC
4. DD

As printed in the paper