2.5.1 Economic influences (EXCHANGE RATES) Flashcards
(7 cards)
1
Q
what is an exchange rate
A
the value of one currency against another
2
Q
whats a depreciating exchange rate
A
when there has been a fall in the value of say sterling against dollar (1 pound can now buy less in dollars)
3
Q
whats an appreciating exchange rate
A
means there has been a rise in the value of say sterling against the dollar meaning we can buy more dollars for our pounds
4
Q
SPICED meaning
A
Strong
Pound
Imports
Cheaper
Exports
Dearer
5
Q
WPIDEC meaning
A
Weak
Pound
Imports
Dearer
Exports
Cheaper
6
Q
impacts of a weak pound
A
exports become cheaper
tourism increases
imports become expensive
risk of inflation
uk competitiveness weakens
7
Q
impacts of a strong pound
A
imports become cheaper
tourism decreases
exports become expensive
lower inflation
uk competitiveness improves
