FOREIGN EXCHANGE

Question 1

What is the GDP

Answer 1

monetory value of all goods and services produced by a country in a specific time period.

Question 2

GDP equation

Answer 2

GDP = C + G + I + NX

Question 3

what does the GDP tell to the south african economy

Answer 3

• provides indication of how economy is doing

- shows if the economy has increased over time

Question 4

describe the link between the multiplier effect and the link to the GDP

Answer 4

foreign currency is bought into the country by foreign tourists
this money flows through the economy
touirists buy goods and services from south africans
money flows through economy
causes value of consumer or private spending to increase = increased GDP

Question 5

what effect will a south african feel when travelling to the UK if the rand is weak

Answer 5

more expensive

not ideal

Question 6

what effect will a british person feel when travelling to SA if the rand is weak

Answer 6

cheaper

ideal

Question 7

name the 3 main currencies in the world

Answer 7

US dollar
pound
euro

Question 8

2 other main currencies in the world

Answer 8

swiss franc

japanese yen