CAIE A-Level Economics 11.2 Exchange rates Question Bank
Practise interpreting exchange rate measures, fixed and managed systems, devaluation terms, capital flows and J-curve effects.
- Syllabus
- 2026–2028
- Course
- Economics 9708
- Level
- A2
Exam points
- interpret currency tables and trade-weighted measures to identify exchange rate changes
- explain central bank intervention in fixed or managed systems using demand and supply
- apply Marshall-Lerner and J-curve logic to current account outcomes
Covered syllabus points
11.2 Exchange rates question 1
[Maximum number: 1]
What is a trade-weighted exchange rate?
A
the price of one currency against a basket of other currencies
B
the price of one currency in terms of another
C
the price of one currency in terms of its real purchasing power
D
the price of one currency being determined by state intervention
A
11.2 Exchange rates question 2
[Maximum number: 1]
A country with fixed exchange rates faces a surplus on its current account.
Which policy is most desirable to maintain the fixed exchange rate?
A
an increase in subsidies given to exporters
B
the imposition of trade barriers on the import of non-essential goods
C
the sale of foreign currencies in the foreign exchange market
D
the use of expansionary monetary policy
D
11.2 Exchange rates question 3
[Maximum number: 1]
A central bank officially lowers the price of its currency relative to an agreed rate in terms of other currencies.
What type of central bank policy is this?
A
appreciation
B
depreciation
C
devaluation
D
revaluation
C
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