4.2.5 Global Competitiveness

Question 1

What does SPICED mean for exchange rates?

Answer 1

Strong
Pound
Imports
Cheaper
Exports
Dearer

Question 2

What does WPIDEC mean in terms of exchange rates?

Answer 2

Weak
Pound
Imports
Dearer
Exports
Cheaper

Question 3

Name 4 ways exchange rates impact a business.

Answer 3

1)Price of exports in international markets
2)Cost of goods bough from overseas
3)Revenues and profits earned overseas
4)Converting cash recipes from customers overseas

Question 4

What does the significance of fluctuating exchange rates depend on?

Answer 4

•Elasticity of demand
•Economic growth
•Use of fixed contracts