Exchange Rates

Which of these is the best definition of 'floating exchange rates?'

• They are set by the government

• They are determined by the demand and supply of the currency

• They are not sinking fast

• They are set by Mr Corby

Which of these is NOT an alternative to floating exchange rates?

• Exchange rates determined by the forex market

• Pegged exchange rates

• Managed Exchange rates

• Fixed exchange rates

Which of these is a determinant of the value of a currency

• Interest rates

• Speculation

• Amount of imports and exports

• Inflation

• All of the other answers

If UK inflation goes up the value of UK exports is likely to

• RISE

• FALL

If the value of the £ rises

• The value of exports rise

• The value of exports fall

• The price of UK exports falls

• The volume of exports remains unchanged

If the value of £ falls then (tick all correct answers)

• The price of UK exports fall

• The value of UK exports rise

• The price of UK exports rise

• The value of UK exports fall

• The volume of UK exports rise

If UK interest rates rise

• Sterling is likely to rise

• Sterling is likely to fall

If UK interest rates fall

• Sterling is likely to fall

• Sterling is likely to rise

If hot money flows into the UK

• The pound is likely to rise

• The pound is likely to fall

If hot money flows out of the UK

• The pound is likely to fall

• The pound is likely to rise