All other things being equal, a fall in a country's exchange rate is most likely to
increase inflation and reduce a negative output gap.
reduce inflation and improve the current account balance.
increase unemployment and increase economic growth.
decrease a positive output gap and reduce a deficit on the current account of the balance of payments.
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.