Exchange Rates Flashcards
1
Q
Impact of rise in value of a currency
A
SPICED
Strong pound
Imports cheap
Exports dear
2
Q
Impact on exporters
A
Foreign prices same Less revenue, lower profits OR domestic prices same Raise prices, decrease in sales, lower market share DEPENDS ON ELASTICITY
3
Q
Impact on importers
A
Importers gain
Pay less for goods
Cost per unit down, higher profits
DEPENDS ON ELASTICITY
4
Q
Define exchange rate
A
Value of one currency I terms of another
