9708/43/O/N/22 

• A government’s decision to move from a fixed exchange rate to a free market floating exchange rate will solve the problem of unemployment in the short run but will cause higher rates of inflation in the long run. Evaluate this statement. [25] 

9708/42/F/M/22 

• Discuss whether there is likely to be a conflict when a government attempts to fix exchange rates while at the same time introducing policies to decrease the level of inflation. [13]