Business Studies Multiple Choice Question – 8 August 2017

A UK business sells shoes in Europe. Each pair is sold for £40. The exchange rate between the pound and Euro decreases from £1 = 2 Euros to £1 = 1 Euro.

Which of the following is MOST LIKELY to best describe the change in price of the shoes?

Select ONE answer:

1. The shoes are now cheaper in Europe
2. The price of the shoes decreases by half the original amount
3. The shoes become more expensive
4. The shoes still sell for £40 in the UK
5. There is no change to the price in Europe

When exchanging from a foreign currency to pounds the rule is……?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 1 – The cost of selling a show worth £40 from the UK to Europe at an exchange rate of €2 will be €80. The cost of selling a show worth £40 from the UK to Europe now at an exchange rate of €1 will be €40, a cost decrease of €40.

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