In Tunisia, resource allocation decisions are made by both the public sector and private sector. Tunisia's GDP increased from 2014 to 2018 but its households saved less. Income levels can be affected by changes in trade union activity and the foreign exchange rate. From 2014 to 2018 , Tunisia experienced a number of strikes organised by its largest trade union, the Tunisian General Labour Union. There was also a significant fall in its foreign exchange rate. Discuss whether or not a fall in its foreign exchange rate will improve a country's macroeconomic performance.

Economics
IGCSE&ALevel
CAIE
Exam No:0455_w21_qp_22 Year:2021 Question No:4(d)

Answer:



Knowledge points:

6.3.4 consequences of foreign exchange rate fluctuations:The effects of foreign exchange rate fluctuations on export and import prices and spending on imports and exports via the PED.

Solution:

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