1 markBalance of Payments and Exchange Rates

CAPE Economics Unit 2 · 2014 · Paper 2 · Question 6(a)(iii)b)

Assume that there is depreciation in the real exchange rate of the Jamaican dollar.

State the effect on Jamaican imports.

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Other parts of this question

6(a)(i)Distinguish between 'nominal exchange rate' and 'real exchange rate'.[4 marks]
6(a)(ii)Assume that the nominal exchange rate between Trinidad (TT) and Barbados (BBD) currency is TT 3 equivalent to BBD 1 and Barbados is the domestic country.…[2 marks]
6(a)(iii)a)State the effect on the price of Jamaican goods relative to foreign goods.[1 mark]
6(a)(iii)c)State the effect on Jamaican exports.[1 mark]
6(b)Use the diagram below to explain the effect of an increase in demand for imported cars in Trinidad and Tobago on the demand for foreign exchange and the price…[4 marks]
6(c)Discuss TWO advantages and ONE disadvantage of globalization on developing countries.[12 marks]

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