In 2014, the Canadian economy was, on the whole, performing well. The value of money was largely being maintained 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 wanted exports to rise while accepting that this could affect the exchange rate.
(a)[2]
Identify any two functions of money.
(b)[4]
Explain two reasons why household borrowing may rise.
(c)[6]
Analyse three ways international trade is different from internal trade.
(d)[8]
Discuss whether an increase in exports will raise the exchange rate.
Worked solution & mark scheme
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