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1. The currency in country X is the Krone while country Y uses the Euro. Country Y has recently experienced an increase in its exchange rate with Country X. Which of the following effects is likely to result in Country Y?
A A stimulus to exports in Country Y
B An increase in the costs of imports from Country X
C Reducing demand for imports from Country X
D A reduction in the rate of cost push inflation (2 marks)
2. The following, with one exception, are 'protectionist measures' in international trade. Which is the exception?
A Import quotas
B Subsidies for exporters
C Customs procedures
D Tariffs
