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2.3 Economic performance

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Question 26

The annual rate of inflation in Country X increases from 1.5% to 5.5%, while the average annual inflation rate of its main trading partners falls from 4.0% to 1.5%. Assuming exchange rates remain constant, all other things being equal, this change is most likely to lead to in the long term:

A

an improvement in Country X's international price competitiveness.

B

a decrease in leakages from Country X's circular flow of income.

C

a deterioration in Country X's current account balance.

D

an increase in injections into Country X's circular flow of income.

Markscheme

2.3 Economic performance Questions

  1. A Level
  2. /Economics
  3. /2.3 Economic performance

327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.

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