WHSS: Exchange Rates MCQs

What would contribute to a fall in the value of the UK pound (£)?

A a fall in interest rates in other countries

B a rise in the number of foreign tourists visiting the UK

C the removal of import tariffs by the USA

D the value of UK imports increasing more than the value of UK exports

• A

• B

• C

• D

What is meant by the depreciation of a currency?

A a fall in its external value

B a fall in its internal value

C a rise in its external value

D a rise in its internal value

• A

• B

• C

• D

The UK pound depreciates against the US dollar from £1 = $1.80 to £1 = $1.50. What does this mean?

A UK imports from the US will cost less.

B US imports from the UK will cost more.

C UK pounds will be dearer in terms of US dollars.

D US dollars will be dearer in terms of UK pounds.

• A

• B

• C

• D

What is not likely to be a barrier to international trade?

A distance

B exchange rates

C language

D specialisation

• A

• B

• C

• D

The table gives the retail price of a product in four countries in 2012. What is needed to make a clear comparison of the price in the four countries?

A direct tax rates

B exchange rates

C import tariff rates

D transport costs

• A

• B

• C

• D

A country’s foreign exchange rate appreciates significantly. Which group in the country will directly benefit from this change?

A a government department which only buys locally made goods

B retailers who get all their supplies from foreign producers

C workers in local companies that compete with foreign firms in the local market

D workers in local companies that sell only in foreign countries

• A

• B

• C

• D

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?

A Imported goods would become cheaper for local people.

B The country would definitely become poorer.

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

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

• A

• B

• C

• D

Countries in Europe were in a recession in 2012. Usually a recession would mean oil prices fall. In fact in 2012, oil prices rose. Which international events might have explained these changes?

• A

• B

• C

• D

What would be most likely to encourage saving?

A a rise in the exchange rate

B a rise in the goods and services tax rate

C a rise in the income tax rate

D a rise in the interest rate

• A

• B

• C

• D

‘The pound sterling made a dramatic recovery in the world's currency markets yesterday.’ To what does this statement refer?

A exchange rate

B growth rate

C interest rate

D tax rate

• A

• B

• C

• D