Category: Economics

A depreciation of the exchange rate of the pound sterling against the US dollar from £1 : $1.50 to £1 : $1.00 must mean that…..?

Select ONE answer:

1. the pound will be undervalued.
2. US imports from the UK will become more expensive.
3. UK imports from the US will become cheaper.
4. dollars will become more expensive in terms of pounds.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which is most likely to cause country X’s exchange rate to depreciate?

Select ONE answer:

1. an increase in country X’s demand for imports
2. an increase in country X’s interest rate
3. an increase in foreign demand for country X’s exports
4. an increase in tourist visits to country X

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which factor determines the purchasing power parity of a currency?

Select ONE answer:

1. relative costs of living
2. relative rates of interest
3. the volume of trade creation
4. the visible balance of payments

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

What is the most likely consequence of an increase in a country’s balance of payments deficit?

Select ONE answer:

1. an increase in the foreign value of the currency of the country
2. an increase in the level of income within the country
3. a reduction in the quantity of money within the country
4. a reduction in unemployment within the country

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The figures show the consumer price index (CPI) of a country. (1971 = 100)

• 1998 – 200
• 1999 – 204
• 2000 – 206
• 2001 – 209

What can be deduced from the data?

Select ONE answer:

1. There was hyperinflation between 1971 and 1998.
2. The rate of inflation rose in 2000.
3. The rate of inflation in 1999 was 4%.
4. The country experienced inflation in the three years down to the end of 2001.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

This work is licensed under a Creative Commons Attribution 4.0 International License.