Overseas buyers increase their orders for UK-made musical instruments. At the same time, UK buyers purchase fewer imported bottles of olive oil. Assume these are the only changes affecting the foreign exchange market for pounds.
Which outcome follows from these changes?
The pound appreciates and the quantity of pounds exchanged rises
The pound depreciates and the quantity of pounds exchanged is uncertain
The pound depreciates and the quantity of pounds exchanged rises
The pound appreciates and the quantity of pounds exchanged is uncertain
53 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.