4.5.3—Consequences of exchange rate changes Topic Practice
4.5.3—Consequences of exchange rate changes Topic Practice
Students practise evaluating real-world impacts of exchange rate changes—on inflation, unemployment, current account, and growth—using AD/AS diagrams and data-driven reasoning.
How this is tested
- explain dollar depreciation with AD/AS, showing net exports fall and AD shifts left
- evaluate consequences of peso depreciation for Argentina using balanced analysis
- link sterling depreciation to current account improvement through stronger net exports