Economics 0455 · IGCSE · Foreign exchange rates

Foreign exchange rates — practice question

In October 2015, 1 UK pound could be exchanged for 100 Indian rupees. By October 2016, 1 UK pound could be exchanged for 80 Indian rupees. What would be a short-term consequence of this change?

  • AEconomic growth in India would increase.
  • BIndian manufacturers would earn higher profits from exports to the UK.
  • CInflationary pressure in the UK would reduce.
  • DUK manufacturers would find it easier to export to India.

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