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4 International trade and the global economy

4 International trade and the global economy

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Question 17

Interest rates in the United Kingdom rise relative to interest rates in the euro area. Foreign savers now want to place more money in United Kingdom bank accounts. Figure 1 shows the initial market for pounds.

Figure 1 image

On Figure 1, draw the effect of this change on the demand for pounds and show the new equilibrium exchange rate.

[2]
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4 International trade and the global economy Questions

  1. GCSE
  2. /Economics
  3. /4 International trade and the global economy

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