1. A Vietnam tour operator relies on sales of holidays to Spain for most of its revenues and profits.

Which of the following changes in an exchange rate is likely to result in higher revenues?
A. A significanr increase in the VND/$ exchange rate
B. A significant fall in the VND/ Euro exchange rate
C. A significant fall in the VND/ $ exchange rate
D. A significant increase in the VND/Euro exchange rate
2. A large fall in the value of the Pound against the Euro would be likely to have the least impact on
a business whose
A. Employees are sourced from Europe
B. Sales are made entirely to domestic( UK) customers
C. Sales are made mainly to export customers in France
D. Purchases are made from suppliers across Europe
3. If the exchange rate appreciates the effect is that
A. Exports and imports become more expensive
B. Exports become more expensive and imports become cheaper
C. Exports and imports become cheaper
D. Exports become cheaper and imports become more expensive
4. What is most likely to happen if there is a significant rise in the value of a country’s currency
A. An increase in unemployment
B. A rise in the volume of exports
C. A rise in the volume of imports
D. A significant rise in inflation
5. Which of the following would make UK goods and services more price competitive in the EU?
A. An increase in economic growth in the EU
B. A falling value of the pound against the Euro
C. A rise in the value of the pound against the euro
D. An increase in interest rates in the EU
6. If the exchange rate appreciates from 1Pound=$1.2 to 1pound=$1.4, a $10 product will now
cost how much in pounds?
A. $8.2
B. P14
C. P8.33
D. P7.14
7. An exchange rate is best describled as
A. The rate used to price imports and exports
B. The ratio of a currency to its global value
C. The price of pounds as expressed in euros
D. The price of one currency expressed in terms of another
8. Which of these uk businesses would benefit most from a rising exchange rate against US$?
A. BAE Systems whose biggest customer is the US government
B. A computer chip make who sell most of their products to Apple in USA
C. A toy retailer who imports most of their products from China
D. A chain of Italian restaurants in London
9. A significant change in the exchange rate will have the biggest effect on international demand
for a firm’s products where:
A. Price elasticity of demand for its producrs in overseas markets is high
B. Income elasticity of demand for its exports is low
C. Price elasticity of demand for its exports is low
D. Income elasticity of demand for its exports is high
10. Which of these UK-based businesses would benefit from a reduction in the value of the Pound
compared with the US$?
A. A toy retailer who imports most of their products from China
B. A laundererre in Basildon
C. A computer cip maker who sell most of their products to Apple in USA
D. A furniture manufacturer who imports raw materials from Germany