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Flashcards in Exchange Rates Deck (9)
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1

Exchange rate definition

The value of a currency in terms of another

2

Strengthening exchange rate

This is when currency increases in value
Can buy more of a foreign currency

3

Weakening exchange rate

A currency decreases in value
Can buy less of a foreign currency

4

Imports

Money leaves the UK

5

Exports

Money enters the UK

6

Spiced Acronym

Strong
Pound
Imports
Cheap
Exports
Dear

7

What does a weakening pound mean for toms toys?

They would have to give up more £ to buy stock from the EU
Increase their costs

8

What could toms toys do if the pound becomes weaker?

Import more from China as it is strengthening against the yuan

9

Due to weakening pound, will all of toms toys costs increase?

No, only 30-40% of their costs are stock costs
Only 40% of these are from the EU