Economics (AS & A Level) · May / June 2026 · Paper 34 · Question 24

The table shows the marginal propensity to consume (mpc) and the sum of the price elasticity of demand for imports and exports (PED_m + PED_x). A government devalues its currency with the aim of reducing both a balance of payments deficit on its current account and a high level of unemployment. Which combination would be most likely to achieve this?

1. Ampc 0.6, PED_m + PED_x 0.8
2. Bmpc 0.6, PED_m + PED_x 1.6
3. Cmpc 0.8, PED_m + PED_x 0.8
4. Dmpc 0.8, PED_m + PED_x 1.6

As printed in the paper