9708/22/F/M/23

• With the help of a diagram, explain what is meant by an appreciation of a floating exchange rate and consider whether a country can only benefit from the appreciationof its currency. [8]

9708/22/O/N/22 

An economy adopts a freely floating exchange rate. 

• Explain how this economy’s exchange rate is likely to be affected when its inflation rate is much higher than inflation rates in its trading partners. [8] 

9708/21/O/N/22 

• Explain, with the use of a diagram(s), two factors that could bring about a depreciation in the value of a country’s exchange rate in a freely floating exchange rate system. [8] 

9708/23/M/J/22 

Some countries consistently have a deficit on the current account of the balance of payments. 

• Discuss the extent to which expenditure-switching policies and expenditure-reducing policies might be able to reduce such a deficit. [12] 

9708/22/M/J/22 

• Discuss whether expenditure-reducing or expenditure-switching policies are more likely to be of greater overall benefit if adopted to remove a persistent deficit on the current account of the balance of payments. [12] 

9708/21/O/N/20 

• Explain, with the aid of a diagram, the impact of a subsidy to domestic producers of a product on the export revenue from that product. [8] 

• Discuss whether supply-side policies are an effective way of correcting a deficit on an economy’s current account of the balance of payments. [12]