Understanding Exchange Rates and SPICED

What does the acronym SPICED stand for in relation to exchange rates?

• Strong Pound Imports Costly Exports Dear

• Strong Pound Imports Cheap Exports Dear

• Strong Pound Imports Cheap Exports Discounted

• Strong Pound Imports Costly Exports Discounted

How does a strong pound affect British businesses that import goods?

• It makes imports more expensive.

• It makes imports cheaper.

• It has no effect on import costs.

• It makes imports unavailable.

How does a strong pound affect British businesses that export goods?

• It makes exports cheaper for foreign buyers.

• It makes exports more expensive for foreign buyers.

• It has no effect on export prices.

• It makes exports unavailable.

• The pound has weakened.

• The pound has strengthened.

• The pound remains the same.

• The pound has depreciated.

What is the likely impact on sales for a British company exporting goods when the pound strengthens?

• Sales will increase.

• Sales will decrease.

• Sales will remain unchanged.

• Sales will fluctuate randomly.

Which of the following is a potential benefit for a British importer when the pound is strong?

• Higher import costs.

• Lower import costs.

• Increased export demand.

• Decreased export demand.

What does a weak pound mean for British tourists travelling abroad?

• Their money will go further.

• Their money will not go as far.

• Their money will have no change in value.

• Their money will be worth more.

If a British company imports raw materials from Europe, how would a weaker pound affect its costs?

• Costs would decrease.

• Costs would increase.

• Costs would remain the same.

• Costs would fluctuate randomly.

What is the effect of a strong pound on the competitiveness of British exports?

• Increases competitiveness.

• Decreases competitiveness.

• No effect on competitiveness.

• Makes exports more attractive.

Which of the following statements is true regarding exchange rates and business profits?

• Exchange rates have no impact on business profits.

• Exchange rates can affect both the cost of imports and the revenue from exports.

• Exchange rates only affect the cost of imports.

• Exchange rates only affect the revenue from exports.