The table below shows the Nominal Effective Exchange Rate (NEER) index for a country operating under a managed float exchange rate system.
| Year | Nominal Effective Exchange Rate (NEER) Index (2021=1002021 = 1002021=100) |
|---|---|
| 2020 | 106.2 |
| 2021 | 100.0 |
| 2022 | 94.5 |
| 2023 | 89.1 |
All other things being equal, the most likely consequence of the changes in the external value of the currency shown in the table for the period 2020 to 2023 is that
the domestic currency price of imported raw materials fell.
domestic inflationary pressures intensified.
exporting firms experienced a decline in their international price competitiveness.
the nation's terms of trade index increased.
310 exam-style questions on AQA A Level Economics 2.6 The international economy (A-level only), covering 2.6.1 Globalisation, 2.6.2 Trade, 2.6.3 The balance of payments, 2.6.4 Exchange rate systems, and 2.6.5 Economic growth and development. Each one has a worked solution and a mark scheme showing where the marks go.