Exchange rates (Edexcel GCSE Business): Flashcards
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Definition: exchange rate
Definition: exchange rate
Cost of purchasing foreign currency
Why exchange rates matter to businesses
Why exchange rates matter to businesses
Impact costs of imports & income from exports
Export calc: £500 at £1=)
Export calc: £500 at £1=)
$1000 (multiply: £500 × 2)
Import calc: 2 (in £)
Import calc: 2 (in £)
£300 (divide: $600 ÷ 2)
How to find £ cost of foreign purchases
How to find £ cost of foreign purchases
Divide foreign currency by exchange rate
Weak pound effect: UK exporters
Weak pound effect: UK exporters
Goods cheaper abroad, boosts sales
Weak pound effect: UK tourism
Weak pound effect: UK tourism
UK more affordable for foreign visitors
Weak pound effect: import businesses
Weak pound effect: import businesses
Higher costs (need more £ for same foreign currency)
Strong pound effect: UK exporters
Strong pound effect: UK exporters
Products more expensive abroad, reduces sales
Strong pound effect: UK importers
Strong pound effect: UK importers
Foreign goods cheaper, lowers input costs
Terms for a weakening pound
Terms for a weakening pound
Depreciating or devaluing currency
Term for a strengthening pound
Term for a strengthening pound
Appreciating currency