Economics 0455 · IGCSE · Foreign exchange rates

Foreign exchange rates — practice question

The table gives the value of the UK pound (£) relative to the US dollar ($) in June and September. June: $£1 = \$1.48$ September: $£1 = \$1.32$ What is the most likely short-run effect on the UK economy of this exchange rate change?

  • Aan increase in the budget deficit
  • Ban increase in the price of exports
  • Can increase in the price of imports
  • Dan increase in unemployment

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