The impact of exchange rates

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1. What is an effect of the fall in the value of pound?

  • Foreign buyers give up more euro to get the same amount of pounds
  • Rise in exchange rate
  • Leads to increased costs if imports are of raw material used in production
  • Fall in export sales
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2. What does export lead to?

  • Money flowing into UK
  • Money flowing out UK
  • Import to UK likely to decrease
  • Increase in interest rates

3. What does trade abroad mean?

  • Someone who has interest in business
  • Increase in rate of interest
  • To import and export things such as raw materials.
  • Decline in economic activity

4. What does import mean?

  • What businesses and customers buy from abroad
  • What businesses sell abroad
  • Percentage reward to savers
  • Increase in level of economic activity

5. What is an effect of the rise in the value of pound?

  • UK companies buying from abroad will find prices cheaper.
  • Qualities such as leadership are shown by entrepreneurs
  • Export sales rise
  • Decrease import to UK

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