A UK maker of ceramic tableware sells some of its products overseas and imports the clay and glaze it uses in production. The pound depreciates.
Which evidence would best support the conclusion that the depreciation has reduced the firm's profit?
Overseas orders rise substantially when foreign prices fall, and imported materials make up a small share of its costs
Overseas orders rise only slightly when foreign prices fall, and imported materials make up a small share of its costs
Overseas orders rise only slightly when foreign prices fall, and imported materials make up a large share of its costs
Overseas orders rise substantially when foreign prices fall, and imported materials make up a large share of its costs
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.