1. Which of the following affect the demand for the pound on the foreign exchange market?
- ICI (a UK firm) buying raw materials from overseas
- UK speculator buying shares on the New York Stock Exchange
- Boeing (US aircraft manufacturer) buying engines from Rolls-Royce in the UK
- UK tourists going on holiday
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2. Interest rates are most likely to be cut when the economy is:
- Entering a recession
- Enjoying a boom
- Experiencing high inflation
- Experiencing much lower employment
3. What is an exchange rate?
- The price of buying foreign currency
- The rate you pay back on a loan
- A tax you pay when buying goods whilst abroad
- A tax businesses pay to operate in another country
4. What is an interest rate?
- The rate at which foreign goods are bought
- A tariff on foreign imports
- The percentage reward or payment over a period of time that is given to savers on savings or paid by borrowers on loans
- A tax paid by consumers when buying foreign goods
5. What is meant by a fixed interest rate?
- An interest rate which will not change at whatsoever over the life of a loan
- An interest rate which can flucuate
- A tax paid by tradesmen
- Interest rates will only change if the prime minister says they must
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