What this practice covers
These questions are drawn from past AQA A-Level papers and filtered to exchange rates and the balance of payments. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising Paper 3 MCQs →
What examiners see students get wrong here
These are the errors that cost marks on exchange rates and the balance of payments, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Using devaluation for a market-driven fall; that is depreciation.
- Asserting a depreciation improves the current account without the Marshall–Lerner condition.
- Omitting imported inflation and the leftward SRAS shift.
- Saying the balance of payments does not balance; it always does; it is the current account that can be in deficit.
- Treating a current account deficit as automatically harmful, without asking about the cause and how it is financed.
- Confusing demand for and supply of the currency, imports supply the domestic currency.
- Discussing competitiveness only in price terms, ignoring non-price factors.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Exchange Rates and the Balance of Payments revision notes.