All other things being equal, if a country operating a floating exchange rate system experiences a significant appreciation in the external value of its currency, which of the following is the most likely macroeconomic consequence?
A deterioration in the country's terms of trade
An increase in demand-pull inflation
A decrease in the level of domestic unemployment
A reduction in cost-push inflationary pressure
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.