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- 1. Multiple Choice
The table gives the price of a paperback book as printed on its back cover.
What is needed to make a clear comparison of the price in the four countries?
consumer price indices
exchange rates
indirect tax rates
inflation rates
- 2. Multiple Choice
What would contribute to a fall in the value of the UK pound (£)?
a fall in interest rates in other countries
a rise in the number of foreign tourists visiting the UK
the removal of import tariffs by the USA
the value of UK imports increasing more than the value of UK exports
- 3. Multiple Choice
What is meant by the depreciation of a currency?
a fall in its external value
a fall in its internal value
a rise in its external value
a rise in its internal value
- 4. Multiple Choice
Two industries in Namibia are fishing and tourism. The value of the currency of Namibia fell in
2001.
If there were no other changes, what resulted from the fall?
Imported goods in Namibian shops became cheaper.
The price of Namibia’s fish sold in foreign markets became cheaper.
The volume of Namibia’s exports decreased.
Tourists were discouraged by higher prices in Namibia.
- 5. Multiple Choice
What is not a main economic government objective?
a balance of payments deficit
economic growth
full employment
price stability
- 6. Multiple Choice
There was an increase in the value of the United States (US) dollar against the South African
Rand.
What is a result of this?
an increase in the number of exports from the US to South Africa
an increase in the number of imports to the US from South Africa
fewer people from the US spend holidays in South Africa
more people from South Africa spend holidays in the US
- 7. Multiple Choice
Which factor would cause a country’s exchange rate to fall?
demand for imports increase
domestic interest rates rise
domestic savings increase
more tourists visit the country
- 8. Multiple Choice
What is likely to cause a rise in a country’s foreign exchange rate?
a fall in its exports of goods and services
a fall in its imports of goods and services
a fall in its inflow of income
a rise in its outflow of transfers
- 9. Multiple Choice
The Mexican currency (the peso) has fallen in value against the US dollar.
What will be the effect of this on the Mexican economy?
a decrease in tariffs on imports
a decrease in the price of exports
a decrease in the price of imports
a decrease in the volume of exports
- 10. Multiple Choice
The UK pound depreciates against the US dollar from £1 = $1.80 to £1 = $1.50.
What does this mean?
UK imports from the US will cost less.
US imports from the UK will cost more.
UK pounds will be dearer in terms of US dollars.
US dollars will be dearer in terms of UK pounds.
- 11. Multiple Choice
One argument for protectionism is to prevent dumping.
What is meant by dumping?
countries paying low wages to their workers to gain price advantage
countries providing poor working conditions for their employees to keep costs low
countries selling products abroad at less than the cost of production
countries selling products abroad that do not meet health and safety standards
- 12. Multiple Choice
The table gives the retail price of a paperback book as printed on its back cover.
What is needed to make a clear comparison of the price in the four countries?
exchange rates
indirect tax rates
inflation rates
retail price indices
- 13. Multiple Choice
The value of the Pakistani rupee changes, from 60 rupees to US$1, to 50 rupees to US$1.
What effect will this have on the price of Pakistani products sold in the US and the price of US
products sold in Pakistan?
price of Pakistani products
sold in the US: increase
price of US products sold in
Pakistan: increase
price of Pakistani products
sold in the US: increase
price of US products sold in
Pakistan: reduce
price of Pakistani products
sold in the US: reduce
price of US products sold in
Pakistan: increase
price of Pakistani products
sold in the US: reduce
price of US products sold in
Pakistan: reduce
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