The pound depreciates and a UK exporter keeps its sterling price unchanged. Overseas demand for its product increases. Which chain best explains this outcome?
The foreign-currency price falls, the product becomes more competitive and export sales rise
The foreign-currency price rises, the product becomes more competitive and export sales rise
The sterling price falls, imported inputs become cheaper and export sales rise
The sterling price stays unchanged, the foreign-currency price rises and export sales fall
48 exam-style questions on AQA GCSE Economics 2.4 International trade and the global economy, covering 2.4.1a The importance of trade, 2.4.1b Advantages of trade and interdependence, 2.4.1c UK exports and imports, 2.4.2a How exchange rates are determined, 2.4.2b Effects of exchange rate changes, 2.4.3a Free-trade and its arguments, 2.4.3b Free-trade agreements such as the EU, 2.4.4a Features and growth of globalisation, 2.4.4b Benefits and drawbacks of globalisation, and 2.4.4c Moral, ethical and sustainability considerations. Each one has a worked solution and a mark scheme showing where the marks go.