Pearson Edexcel Level 3 GCE 9EB0/03 2022 Economics B Advanced PAPER 3: The economic environment and business

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nswer ALL questions. SECTION A Read the following extracts (A to E) before answering Question 1. Write your answers in the spaces provided. Extract A “GDP measures what GDP is supposed to measu... re. But it doesn’t count everything that counts.” Matthew Yglesias (Source: adapted from https://www.weforum.org/agenda/2015/06/ a-partial-defense-of-gross-domestic-product) Extract B Why is the yuan’s exchange rate with the US dollar important? The US dollar/Chinese yuan exchange rate is an indicator of relative economic strength and has a direct impact on each nation’s economy by affecting the value of imports and exports. In general, a stronger exchange rate makes a country’s exports more expensive and makes imports, cheaper. A weaker yuan against the US dollar would generally make Chinese goods exported to the US cheaper, increasing demand, while making US exports to China more expensive, reducing demand. As a result the US trade deficit would likely widen. A stronger yuan against the US dollar would have the opposite effect. (Source: adapted from https://www.scmp.com/economy/china-economy/artic [Show More]

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