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CAIE A-Level Economics A2 10.2.2 Balance of Payments and Inflation Questions

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 two-way links between inflation and the balance of payments through competitiveness, import costs and exchange rates.

CAIE A-Level Economics A2 10.2.2 Balance of Payments and Inflation Questions 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

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