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Multiple-choice questions:
The £1 sterling – dollar exchange rate rises from $1.98 to $2.00. This implies:
- British exports become cheaper;
- the pound has depreciated;
- the dollar has appreciated;
- the pound has appreciated;
- imports into Britain become more expensive.
Which of the following is likely to increase the value of the pound on the foreign exchanges?
- An increase in British interest rates;
- An increase in US interest rates;
- A rise in the British inflation rate;
- An increase in British imports;
- None of the above.
An increase the value of the pound on the foreign exchanges will:
- make US goods more expensive in Britain;
- make US goods cheaper in Britain;
- not change the price of US goods in Britain;
- make British goods cheaper in the US;
- not change the price of British goods in the US.
The exchange rate for the £sterling is determined by:
- foreign exchange dealers;
- arbitrage;
- demand and supply of £s;
- demand and supply of other currencies;
- the UK government.
US citizens demand for the £ sterling depends on:
- US demand for British imports;
- British citizens demand for tourist services in the US;
- British demand for US exports;
- the wealth of US citizens;
- the wealth of British citizens.