(a)[8]
Using a diagram, explain why an economy's floating exchange rate might depreciate.
(b)[12]
Discuss whether a current account deficit is always a serious economic issue for a country.
Economics 9708 · AS & A Level · 6.4
6.4 — practice question
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Understanding of a depreciating floating exchange rate: depreciation means a fall in the value of a currency set by market forces (caused by a fall in demand or a rise in supply).” …
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