Economics 0455 · IGCSE · Foreign exchange rates

Foreign exchange rates — practice question

The Pakistani rupee’s exchange rate shifts from 60 rupees to US$1 to 50 rupees to US$1. What impact will this have on the price of Pakistani goods sold in the US and the price of US goods sold in Pakistan?

  • Aprice of Pakistani products sold in the US: increase; price of US products sold in Pakistan: increase
  • Bprice of Pakistani products sold in the US: increase; price of US products sold in Pakistan: decrease
  • Cprice of Pakistani products sold in the US: decrease; price of US products sold in Pakistan: increase
  • Dprice of Pakistani products sold in the US: decrease; price of US products sold in Pakistan: decrease

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI