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WorksheetsOCR GCSE Economics - 4.3 - Exchange Rates
Total questions: 10
Worksheet time: 5mins
What is an exchange rate?
The rate at which goods are exchanged between two countries
The price of one nation’s currency in terms of another’s
How many GBPs you can exchange at Travelex
The price of goods in terms of a foreign currency
Why do changing exchange rates help one country and hurt the other?
One side loses purchasing power and the other gains it
Takes money away from one side and gives it to the other
Causes war between the two countries
One country’s government introduces tariffs to protect local industries
If the US $ were to appreciate in relation to the Euro, what effect would this have?
European consumers would have more purchasing power in the US
US consumers can buy more European goods and services for fewer US dollar
US consumers can buy more English goods and services for fewer US dollars
European tourists to the US will spend more dollars
How does the inflation rate affect currency value/exchange rate?
Higher inflation leads to depreciating currency & visa versa
Increasing inflation leads to more favourable exchange rates
Higher inflation leads to currency appreciation
Lower inflation leads to more favourable exchange rate
If the Mexican Peso depreciates in relation to the Chinese Yuan, how is Mexico affected?
Mexico has less purchasing power in Chinese currency
Mexico benefits from increased purchasing power
Mexico would have more Chinese investors
They would be invaded by China
What is likely to cause a rise in a country’s foreign exchange rate?
A fall in its exports of goods and services
A fall in its imports of goods and services
A fall in its inflows of income
A rise in its outflows of transfers
Which country is the world’s largest importer?
Russia
China
United States of America
UK
True or False: Having a trade surplus means the country exports more than it imports, while having a trade deficit means the country exports less than it imports.
True
False
Trade between countries is NOT dependent on…
Currency exchange rates
Demand for a country’s goods
Social stability
Interest rates
What is meant by the depreciation of a currency?
A fall in its external value
A fall in its internal value
A rise in its external value
A rise in its internal value
