test actions gs

Question 1

what is an exchange rate

Answer 1

the value of one currency in terms of another

Question 2

what is international competitiveness

Answer 2

the ability for a country to compete competitively in international markets

Question 3

diagram for a fall in sterling

Answer 3

d shifts left to form d2 and p1 falls to p2.

Question 4

results of weak pound (EXPORTS)

Answer 4

exports become cheaper, people abroad are able to afford UK goods and services

Question 5

Results of weak pound (imports)

Answer 5

importing raw materials become more expensive, increasing cost of production, may be difficult to charge lower prices, competitivness falls

Question 6

policies to improve international competitiveness

Answer 6

• improving functions of labour (investment in education and training)
• supply side polocies (capital
• increase in migration - greater productivity