In 2014, the Canadian economy was broadly performing well. Money was largely keeping its value, and unemployment was declining. Even so, the country had increasing household debt and a deficit on the current account of its balance of payments. In 2014, the Canadian Government aimed to boost exports while acknowledging that this could affect the exchange rate.
(a)[2]
Identify two separate functions of money.
(b)[4]
Explain two reasons why household borrowing may rise.
(c)[6]
Analyse three ways in which international trade is different from internal trade.
(d)[8]
Discuss whether a rise in exports will increase the exchange rate.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A medium used for exchange” …