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© UCLES 2007
UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
General Certificate of Education
Advanced Subsidiary Level and Advanced Level
Paper 2 Data Response and Essay (Core)
1 hour 30 minutes
READ THESE INSTRUCTIONS FIRST
If you have been given an Answer Booklet, follow the instructions on the front cover of the Booklet.
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use a soft pencil for any diagrams, graphs or rough working.
Do not use staples, paper clips, highlighters, glue or correction fluid.
Answer the question.
Brief answers only are required.
Answer any one question.
You may answer with reference to your own economy or other economies that you have studied where
relevant to the question.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
© UCLES 2007
Answer this question.
US Current Account and US$ Exchange Rate
Fig.1 shows the US current account balance as a % of GDP from 1980 to 2002, a period in which
US GDP rose continuously. Fig. 2 shows the US$ exchange rate against the euro for the same
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
euro stronger /
US$ stronger /
1980 1982 1984 1986 1988 1990
Fig. 1 US current account balance as % of GDP 1980 to 2002
Fig. 2 US$ exchange rate against the euro 1980 to 2002
The figures before 1999 are an imaginary exchange rate based on the values of the main
European currencies, as