Table 1 shows the value of two types of annual transaction involving the UK. Assume that all other influences on the foreign exchange market are unchanged.
| Transaction | Year 1 (£ billion) | Year 2 (£ billion) |
|---|---|---|
| Overseas buyers' payments for UK-made pharmaceutical products | 18.0 | 21.0 |
| UK retailers' payments for imported fruit | 5.0 | 4.5 |
Using Table 1, explain the likely effect of these changes on the value of the pound and on the costs of UK manufacturers that use imported components.
118 exam-style questions on AQA GCSE Economics 2.4 International trade and the global economy, covering 2.4.1a The importance of trade, 2.4.1b Advantages of trade and interdependence, 2.4.1c UK exports and imports, 2.4.2a How exchange rates are determined, 2.4.2b Effects of exchange rate changes, 2.4.3a Free-trade and its arguments, 2.4.3b Free-trade agreements such as the EU, 2.4.4a Features and growth of globalisation, 2.4.4b Benefits and drawbacks of globalisation, and 2.4.4c Moral, ethical and sustainability considerations. Each one has a worked solution and a mark scheme showing where the marks go.