(a)[2]
Describe the movement in the value of the Indonesian rupiah from July 2009 to July 2013 shown in Fig.1.
(b)[2]
Explain how the fall in the rupiah could have caused the first current account deficit since 1997, as stated in Extract 1.
(c)[4]
With the aid of a diagram, explain how a cut in fuel subsidies contributed to the 44% rise in the price of fuel.
(d)
- How might a rise in interest rates in the US affect Indonesia’s balance of payments? [2]
- With the aid of a diagram, explain how this increase in US interest rates would be expected to lead to a fall in the value of the Indonesian rupiah. [4]
(e)[6]
Discuss how any two changes described in the data might be expected to influence aggregate demand and aggregate supply in Indonesia, and evaluate how prices and output may be affected.