Exchange Rates Flashcards
1
Q
What is exchange rate?
A
An exchange rate is the value of one currency stated in terms of another. Eg - £1 = $1.50
2
Q
How does rising exchange rate affect a business?
A
The price of UK exports to other countries increases
Sales of UK exports may fall
UK exporters profit may fall
The price of imported resources may fall
UK businesses may find it difficult to compete
3
Q
Falling exchange rates
A
This will lead to reduction in the value of one currency against another.
4
Q
What are imports?
A
Goods and services purchased from overseas businesses by consumers
5
Q
What are exports?
A
Goods and services produced by a business in one country and sold in another
