← A Level Economics Revision · All Currency appreciation (hot money) questions · Home
A-Level Economics · Currency appreciation (hot money) diagram question
Which point on the exchange-rate axis is the APPRECIATED pound?
The diagram
The answer
Point B. D₂ crosses S at F; read across to the axis — the pound rises from e₁ to e₂, and more pounds are traded too. Find the new crossing first: D₂ meets S at point F. Then read ACROSS to the exchange-rate axis — point B, e₂. Appreciation means each pound buys MORE dollars, so B sits ABOVE A.
Test yourself properly
This is one of 6 questions on the currency appreciation (hot money) diagram — every corner lettered, every wrong answer diagnosed.
▶ Play the currency appreciation (hot money) game All questions & answers
George Chantry
Professional A-Level Economics tutor · Oxford PPE First, 3 prizes in economics · 7,000+ hours one-to-one