WHALES O Level Crash Economics: Exchange Rate

There was an increase in the value of the United States (US) dollar against the South African Rand. What is a result of this?

A an increase in the number of exports from the US to South Africa

B an increase in the number of imports to the US from South Africa

C fewer people from the US spend holidays in South Africa

D more people from South Africa spend holidays in the US

• A

• B

• C

• D

Two industries in Namibia are fishing and tourism. The value of the currency of Namibia fell in 2001. If there were no other changes, what resulted from the fall?

A Imported goods in Namibian shops became cheaper.

B The price of Namibia’s fish sold in foreign markets became cheaper.

C The volume of Namibia’s exports decreased.

D Tourists were discouraged by higher prices in Namibia.

• A

• B

• C

• D

The value of the Pakistani rupee changes, from 60 rupees to US$1, to 50 rupees to US$1. What effect will this have on the price of Pakistani products sold in the US and the price of US products sold in Pakistan?

• A

• B

• C

• D

A country experienced a deficit on its trade in goods, income and current transfers. Overall, it had a surplus on the current account of its balance of payments. What must this mean?

A It had a floating exchange rate.

B It had a surplus on its trade in services.

C It had a surplus on the government’s budget.

D It was a developing country.

• A

• B

• C

• D

Which name is given to the external value of a currency in terms of another currency?

A the balance of trade

B the exchange rate

C the relative inflation rate

D the supply of money

• A

• B

• C

• D

The table shows the number of units of foreign currency that the UK pound (UK£) could buy in August 2012 and August 2013. What can be concluded from the table about the change in currency values between 2012 and 2013?

A The Argentine peso appreciated against the UK pound.

B The Argentine peso depreciated against the euro.

C The euro depreciated against the UK pound.

D The South African rand appreciated against the euro.

• 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