CAIE A-Level Economics 10.2.2 Balance of Payments & Inflation
Practise explaining two-way links between inflation and the current account through competitiveness, import costs and exchange rates.
- Syllabus
- 2026–2028
- Course
- Economics 9708
- Level
- A2
Exam points
- explain how domestic inflation changes export competitiveness and import expenditure
- trace imported inflation or exchange-rate adjustment from a current-account imbalance
- judge which problem is more serious using unemployment, growth and policy consequences
10.2.2—Balance of payments and inflation question 1
[Maximum number: 1]
The inflation rate in a country increased.
Which effect would this most likely have on the country's balance of payments?
A
an improvement in the current account balance
B
an increase in price competitiveness
C
an increase in export revenue
D
an increase in import expenditure
D
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