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6. In the UK, the base interest rate is set by...

  • Chief secretary to the treasury
  • Monetary Policy Commitee
  • The chancellor of the exchequer
  • The house of commons

7. Which of the following affect the demand for the pound on the foreign exchange market?

  • UK speculator buying shares on the New York Stock Exchange
  • UK tourists going on holiday
  • Boeing (US aircraft manufacturer) buying engines from Rolls-Royce in the UK
  • ICI (a UK firm) buying raw materials from overseas

8. What is meant by a fixed interest rate?

  • Interest rates will only change if the prime minister says they must
  • An interest rate which will not change at whatsoever over the life of a loan
  • A tax paid by tradesmen
  • An interest rate which can flucuate

9. Interest rates are most likely to be cut when the economy is:

  • Entering a recession
  • Experiencing much lower employment
  • Enjoying a boom
  • Experiencing high inflation

10. 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