Exchange Rate

If the exchange rate is £1 = $1.25, what is $2250 equivalent to in £ pounds?

• £2813

• £2250

• £1800

• None of the answers

If the exchange rate is £1 = $1.25, how much does $1 equal in £ pounds?

• £0.80

• £0.85

• £0.75

• £1.25

• None of the answers

If £1 = €1.26 and £1 = $1.50, approximately how much does €1 equal in $ dollars?

• $1.29

• $1.06

• $1.11

• $1.19

You are a UK business that exports to the US market. If the £1 goes from being equal to $1.25 to $1.50, what will happen to your exports to the US?

• Exports to US will become cheaper and increase

• Exports to US will become more expensive and decrease

• Exports to US will stay the same

• Exports to US will become cheaper and decrease

• None of the answers

You are a UK business that imports a lot of supplies from the US market. If the £1 goes from being equal to $1.25 to $1.50, what will happen to your imports from the US?

• Imports from the US will be more expensive and decrease

• Imports from the US will be cheaper and increase

• Imports from the US will stay the same

• None of the answers

If US businesses demand more Chinese currency, which way will the demand curve shift?

• Right

• Left

• Stay the same

• None of the answers

If the demand curve shifts to the right, what will happen to $/Y in the graph?

• Depreciate

• Appreciate

• Stay the same

• None of the answers

If the supply curve shifts to the right, what will happen to $/Y in the graph?

• Depreciate

• Appreciate

• Stay the same

• None of the answers

A developing country’s two major sources of income from international trade are fishing and tourism. If the country’s exchange rate depreciated, what is likely to happen?

• Imported goods would become cheaper for local people.

• The country would definitely become poorer.

• The price of fish sold as exports would become cheaper.

• Tourists to the country would be discouraged by higher prices.

When the value of the British pound changes from $1.25 to $1.50, then

• the pound has appreciated and the dollar has appreciated.

• the pound has depreciated and the dollar has appreciated.

• the pound has appreciated and the dollar has depreciated.

• the pound has depreciated and the dollar has depreciated.