Exchange rates

Explain one reason why a country might operate a managed exchange rate. Refer to Extract D in your answer.

With reference to the second paragraph of Extract E, examine two likely problems for the expansion of the chocolate industry in Ghana.

Discuss factors influencing the level of aggregate demand in Ghana. Use an aggregate demand and aggregate supply diagram in your answer.

EITHER

Evaluate the microeconomic and macroeconomic effects of high interest rates in Ghana, or another developing country of your choice.

Evaluate the microeconomic and macroeconomic effects of Ghana joining the African Continental Free Trade Agreement (Extract F).

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In 2022 the value of UK exports fell by 14% compared with 2020. In contrast, the global average increase in exports was 8.2% over the same time period. The UK’s competitiveness also fell, dropping five places from 18th in 2021 to 23rd in 2022 in the world competitiveness rankings.

(Sources: adapted from https://www.ft.com/content/021c629d-5853-4111-9600-ab5f0eb65a35 and https://www.imd.org/centers/world-competitiveness-center/rankings/ world-competitiveness)

Evaluate macroeconomic policies that could be used to increase international competitiveness in the UK’s export markets.

Using the information provided, explain one externality that arises in the food delivery market.

With reference to Extract B, examine whether the demand for delivered food is price inelastic and income elastic.

With reference to Extract C, discuss the likely effects of increasing integration within the food delivery market.

EITHER

Evaluate the microeconomic and macroeconomic effects of a depreciation of the pound. Refer to restaurants or other food delivery services in your answer.

Evaluate the microeconomic and macroeconomic effects of significant increases in the minimum wage. Refer to restaurants or other food delivery services in your answer.

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British pound to US dollar exchange rate (value of one pound in dollars), June 2017 to June 2019.

(Source adapted from: https://www.xe.com/currencycharts/?from=GBP&to=USD&view=2Y)

Which one of the following has been the overall change in the British pound to US dollar exchange rate from 1st January 2018 to 1st January 2019?

Explain the likely impact of the change in the exchange rate of the pound shown in the graph from 1st January 2018 to 1st January 2019 on the UK current account of the balance of payments.

In 2018, the International Monetary Fund (IMF) lent Argentina $57 billion as part of a bailout package to help prevent the country’s government defaulting on its debts. This financial crisis also caused significant capital flight out of Argentina’s economy.

(Source adapted from: https://www.ft.com/content/737b48bc‑c1c9‑11e8‑95b1‑d36dfef1b89a)

Explain the role of the IMF in providing financial assistance to countries such as Argentina.

Which one of the following is most likely to happen to Argentina’s currency value as a result of capital flight, assuming it is operating with a floating exchange rate system?

In 2018, the International Monetary Fund (IMF) lent Argentina $57 billion as part of a bailout package to help prevent the country’s government defaulting on its debts. This financial crisis also caused significant capital flight out of Argentina’s economy.

(Source adapted from: https://www.ft.com/content/737b48bc‑c1c9‑11e8‑95b1‑d36dfef1b89a)

Explain the role of the IMF in providing financial assistance to countries such as Argentina.

Which one of the following is most likely to happen to Argentina’s currency value as a result of capital flight, assuming it is operating with a floating exchange rate system?

Explain how the Turkish central bank intervenes in the currency market to prevent ‘excessive appreciation or depreciation of the Turkish lira’ (Extract A, lines 7–8).

Examine two reasons why the Turkish government may want to avoid a significant fall in the exchange rate of the Turkish lira.

Discuss the likely success of policies to reduce the consumption of single‑use plastic bags in cities such as Istanbul.

EITHER

Evaluate the likely microeconomic and macroeconomic effects of a rise in interest rates in Turkey.

Evaluate the microeconomic and macroeconomic impact of large infrastructure projects such as the building of a third airport in Istanbul.

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Explain how the Turkish central bank intervenes in the currency market to prevent ‘excessive appreciation or depreciation of the Turkish lira’ (Extract A, lines 7–8).

Examine two reasons why the Turkish government may want to avoid a significant fall in the exchange rate of the Turkish lira.

Discuss the likely success of policies to reduce the consumption of single‑use plastic bags in cities such as Istanbul.

EITHER

Evaluate the likely microeconomic and macroeconomic effects of a rise in interest rates in Turkey.

Evaluate the microeconomic and macroeconomic impact of large infrastructure projects such as the building of a third airport in Istanbul.

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With reference to Extract A, explain the role of forward markets in currencies.

With reference to Extract A and Figure 1, examine the likely impact of the change in the sterling exchange rate on the UK economy.

With reference to the last paragraph in Extract C, assess the impact of a fall in real incomes on subjective happiness.

With reference to Extract C, discuss the potential conflicts between macroeconomic objectives when the central bank attempts to control inflation.

Discuss whether providing substantial government financial support to banks is the best policy response during a financial crisis.

The British pound fell by over 10% to a 30-year low against the US dollar after the UK voted to leave the European Union.

To what extent will this depreciation impact on future economic growth in the UK?

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With reference to Figure 1, calculate the percentage change in the value of the euro in pounds from the start of 2009 to the start of 2015.

With reference to the information provided and your own knowledge, examine two factors which might explain the change in the rate of Eurozone inflation as shown in Figure 2.

Since mid-2015 the euro has appreciated. Assess the likely impact of an appreciation of the euro on the current account of the balance of payments for Eurozone countries.

Discuss the likely success of the ECB’s quantitative easing programme in moving Eurozone inflation closer to ‘the central bank’s ceiling of 2%’ (Extract A, line 17).

Discuss ‘looser fiscal policy’ and ‘supply-side reforms’ (Extract A, lines 20 and 21) that may be used by governments of Eurozone countries to increase economic growth.

With reference to Figure 2, explain one likely reason for the change in the Chile peso exchange rate between 2013 and 2015.

Examine the likely impact of externalities of copper mining on firms and communities within Chile.

Apart from externalities, discuss the problems that Chile faces as a result of dependency on copper mining.

EITHER

With reference to the information provided and your own knowledge, evaluate the microeconomic and macroeconomic effects of policies that could be used to stimulate economic growth and development in Chile.

With reference to the information provided and your own knowledge, evaluate the microeconomic and macroeconomic impact on Chile’s economy of changes in the level of investment.

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