Question 1
Interest rates in the United Kingdom rise relative to interest rates in the euro area. Foreign savers now want to place more money in United Kingdom bank accounts. Figure 1 shows the initial market for pounds.
Figure 1
On Figure 1, draw the effect of this change on the demand for pounds and show the new equilibrium exchange rate.
4.3 Exchange rates Questions
21 exam-style questions on OCR GCSE Economics 4.3 Exchange rates, covering 4.3.1 Draw how exchange rates are determined, 4.3.2 Analyse how exchange rates are determined, 4.3.3 Calculate currency conversion, 4.3.4 Analyse exchange rate data, and 4.3.5 Effect of exchange rate changes. Each one has a worked solution and a mark scheme showing where the marks go.