Economics (AS & A Level) · Oct / Nov 2025 · Paper 14 · Question 30

Both the US and the EU operate in floating exchange rate markets. The rate of exchange fluctuated greatly during the period shown. | year | US dollar–euro rate of exchange | | 2000 | 0.84 dollars per euro | | 2008 | 1.59 dollars per euro | | 2022 | 1.00 dollar per euro | What would explain the changes in the US dollar–euro rate of exchange?

1. Achanges in the supply and demand for dollars and euros in the foreign exchange market
2. Bcontinuous appreciation of the US dollar throughout the period
3. Ccontinuous depreciation of the US dollar throughout the period
4. Drestraints placed by trade agreements on the rate of exchange

As printed in the paper