The table below shows different combinations of the foreign currency price of New Zealand exports and the level of New Zealand aggregate demand. All other things being equal, which combination is the most likely consequence of a depreciation in the exchange rate of the New Zealand dollar (NZD)?
| The foreign currency price of New Zealand exports | New Zealand aggregate demand | |
|---|---|---|
| A | Rises | Falls |
| B | Falls | Falls |
| C | Rises | Rises |
| D | Falls | Rises |
The foreign currency price of New Zealand exports rises, New Zealand aggregate demand falls
The foreign currency price of New Zealand exports falls, New Zealand aggregate demand falls
The foreign currency price of New Zealand exports rises, New Zealand aggregate demand rises
The foreign currency price of New Zealand exports falls, New Zealand aggregate demand rises
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.