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Discuss the impacts of fluctuations in foreign exchange rates on the prices of exports and imports, as well as on spending related to these goods, considering price elasticity of demand (PED).

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Cambridge IGCSE EconomicsInternational trade and globalisation

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Discuss the impacts of fluctuations in foreign exchange rates on the prices of exports and imports, as well as on spending related to these goods, considering price elasticity of demand (PED)

  • This point belongs to Foreign exchange rates, especially Foreign exchange rates outcomes.
  • You need to be able to discuss the impacts of fluctuations in foreign exchange rates on the prices of exports and imports, as well as on spending related to these goods, considering price elasticity of demand (PED).
  • The key ideas to know are Discuss and Explain.
  • Use the linked flashcards and practice questions to check recall, then practise applying the idea in an exam-style answer.

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DiscussExplain

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Paper 2 structured question: Foreign exchange rates

Paper 2Structured Questions1 marks

Description

Impact of Exchange Rate Fluctuations

The domestic currency has appreciated against foreign currencies, leading to changes in the prices of imports and exports.

  1. a

    State the effect of currency appreciation on import prices.

    Aim for approximately 1 distinct marking point.

    [1]
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