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Worksheetseco review
Total questions: 15
Worksheet time: 10mins
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 US dollars you can exchange for RMB at Travelex
The price of goods in terms of a foreign currency
What does it mean when an economist says a currency is stronger?
It can be exchanged for more of a lesser foreign currency
It can be converted to prices in any currency
There a few things it could buy
It will buy fewer foreign goods
What is a decrease in the value of a currency?
Appreciation
Depreciation
Inflation
Absolute advantage
A depreciation of a country's currency means for this country's residents that imported goods are
Cheaper
More expensive
An appreciation of a country's currency means that for foreigners this country's goods are
Cheaper
More expensive
Which of the following factors will cause cost-push inflation?
Rising wages
Lower business taxes
Cheaper imported raw materials
Rising prices of raw materials
Which of the following changes may result from a weak exchange rate?
Higher wages
Imported raw materials become more expensive
An increase in government spending
An increase in export sales
If the US $ were to appreciate in relation to the Euro, what effect would this have?
European consumers would have more purchasing power in US
US consumers can buy more European goods and services for fewer $$
US consumers can buy more English goods and services for fewer $$
European tourists to the US will spend more $$
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
You are a UK business that exports to the US market. If the £ goes from £1 = $1.25 to £1 = $1.50, what will happen to your exports to the US?
Exports to US will become more expensive and decrease
Exports to US will become cheaper and increase
Exports to US will stay the same
None of the answers
Exports to US will become cheaper and decrease
You are a UK business that imports a lot of supplies from the US market.
If the £ goes from £1 =$1.25 to £1 =$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
Select all of the following that will be impacted by a change in exchange rates:
Prices of exports
Costs of imports
Competiveness
None of the answers
Inflation is:
A number set by the government that causes prices to rise.
A number measured by the government that describes the changing prices of everyday goods.
Automatically subtracted from interest rates quoted by banks for their savings accounts.
Interest rates are
the cost of borrowing and the reward for saving
a general increase in the prices of goods and services in an economy
a rate at which one currency will be exchanged for another currency
Which of the following typically rises during a recession?
Unemployment
Average income
Production
Stock prices
