A coffee roaster in Leeds imports coffee beans from a supplier in Brazil. The invoice is for R$280,000. When the order was placed, the invoice would have cost the roaster £43,750. By the time the roaster pays the invoice, the exchange rate has changed.
| Exchange rate when the invoice is paid | Value |
|---|---|
| Brazilian reais per £1 | R$5.60 |
Calculate the increase in the sterling cost of the invoice.
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.