CAIE A-Level Economics A2 10.2.1 Internal and External Money Value Questions

Practise distinguishing domestic purchasing power from foreign-exchange value and tracing inflation, depreciation, interest rates or QE through both measures.

Exam points

Distinguish the internal purchasing power and external foreign-exchange value of money and explain how inflation, rates and QE affect them.

[Maximum number: 1]

The US government has been using a policy of quantitative easing to increase economic growth.
What is the most likely effect of this policy on the internal and external value of the US dollar?

internal value

external value

decrease

increase

decrease

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CAIE A-Level Economics A2 10.2.1 Internal and External Money Value Questions question 1