International trade (OCR A-Level Economics): Quizzes
📚Quizzes
Practise the questions
12 questions from this quiz
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Practise the questions
12 questions from this quiz
What is an exchange rate?
What is an exchange rate?
Price of one currency in another
How is a floating exchange rate determined?
How is a floating exchange rate determined?
Free market forces of supply & demand
Who sets a fixed exchange rate?
Who sets a fixed exchange rate?
Government or central bank
What is a managed float exchange rate system?
What is a managed float exchange rate system?
Market-led with occasional gov't action
How do higher interest rates affect a currency's exchange rate?
How do higher interest rates affect a currency's exchange rate?
Attract foreign capital, raising rate
How does lower inflation typically affect a currency's value?
How does lower inflation typically affect a currency's value?
Makes currency more valuable
Why does political stability attract foreign investors?
Why does political stability attract foreign investors?
Less risk for political turmoil
What happens when investors expect a currency to strengthen?
What happens when investors expect a currency to strengthen?
They buy more of that currency now
If GBP USD, how many USD equal GBP?
If GBP USD, how many USD equal GBP?
USD
In a floating system, where is equilibrium exchange rate determined?
In a floating system, where is equilibrium exchange rate determined?
Intersection of supply & demand
If a fixed-rate currency is undervalued, what does the central bank do?
If a fixed-rate currency is undervalued, what does the central bank do?
Buys own currency using reserves
Which currencies typically have floating exchange rates?
Which currencies typically have floating exchange rates?
USD, EUR, and GBP