Skip to content
MathsGenie logo
Open app

Course home

  1. A Level
  2. Economics OCR
  3. Question bank

Economic policy objectives

EasyMediumHard
123456789101112131415161718192021
Question 6

Four economies are currently experiencing a deficit on the current account of their balance of payments. Each economy's currency depreciates by 10% on the foreign exchange markets.

The table below shows the price elasticities of demand for exports (PEDXPED_XPEDX​) and imports (PEDMPED_MPEDM​) for each economy:

EconomyPrice elasticity of demand for exports (PEDXPED_XPEDX​)Price elasticity of demand for imports (PEDMPED_MPEDM​)
Country W-0.35-0.45
Country X-0.40-0.55
Country Y-0.45-0.65
Country Z-0.25-0.70

Which economy will successfully reduce its current account deficit as a result of the currency depreciation?

Country W

Country X

Country Y

Country Z

Economic policy objectives Questions

  1. A Level
  2. /Economics
  3. /Economic policy objectives