CAIE A-Level Economics 6.4.3 Depreciation vs appreciation

CAIE A-Level Economics 6.4.3 Depreciation vs appreciation
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise reading exchange-rate data to distinguish appreciation from depreciation and explain effects on export and import prices.

How this is tested

  • interpret currency tables or graphs to state appreciation or depreciation
  • explain how a stronger or weaker currency changes export and import prices
  • distinguish market depreciation from official devaluation where data show a managed change

Question 17

[Maximum number: 1]

The graphs show the changes in the exchange rates of the pound sterling ( £ ) against the US dollar (US$) and the euro (€) between the years 2001 and 2003.

US\$ per £

US\$ per £

Figure for Question 17 — CAIE A-Level Economics

What happened to the value of the £ between the years 2001 and 2003?

A

The £ appreciated against the US $ and depreciated against the €.

B

The £ appreciated against the US $ and the €.

C

The £ depreciated against the US $ and appreciated against the €.

D

The £ depreciated against the US $ and the €.