IB Economics HL 4.6.4 Current account and exchange rate Question Bank
Practise IB Economics HL 4.6.4 by applying current account and exchange rate concepts to exam-style questions.
- Syllabus
- First assessment 2022
- Course
- Economics HL
- Level
- HL
Practise IB Economics HL 4.6.4 by applying current account and exchange rate concepts to exam-style questions.
The following diagram illustrates the domestic market for rice in Country Alpha. This diagram will be used for several of the following questions.

The following table provides selected data from the balance of payments for Alpha for 2016.

Table 1
Outline how Alpha's current account balance for 2016 is likely to affect the exchange rate of its currency.
Level
Marks
0
The work does not meet a standard described by the descriptors below.
1
Vague outline.
For the idea that a deficit will cause the exchange rate to fall.
2
Accurate outline.
For outlining that a current account deficit implies that the supply of the currency exceeds the demand for the currency causing the exchange rate to depreciate
OR demand for currency shifts (has decreased) left OR supply of currency shifts (has increased) right, (or, both) either of which causes a depreciation.
Marking guidance:
OFR applies if a current account surplus has been calculated in part (f)(i).