UK interest rates rise, attracting foreign savings, while UK households sharply increase imports. What can be concluded about the pound's exchange rate?
It must appreciate
It must depreciate
It remains fixed
The effect is uncertain because demand and supply of pounds both increase
21 exam-style questions on OCR GCSE Economics 4.3 Exchange rates, covering 4.3.1 Draw how exchange rates are determined, 4.3.2 Analyse how exchange rates are determined, 4.3.3 Calculate currency conversion, 4.3.4 Analyse exchange rate data, and 4.3.5 Effect of exchange rate changes. Each one has a worked solution and a mark scheme showing where the marks go.