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Exchange Rates | Mathematics for GCSE/IGCSE - Year 11 PDF Download

Exchange Rates

Exchange rates are essential for comparing and converting between different currencies. When tackling exchange rate conversion questions, having a solid grasp of ratio and proportion concepts is advantageous.

How to Simplify Exchange Rate Questions

One effective method to simplify exchange rate questions is by using ratios.
Here's a step-by-step guide:

  • Step 1: Put exchange rates in ratio form (use multiple lines if needed)
  • Step 2: Add lines for prices/costs
  • Step 3: Utilize scale factors to complete the lines
  • Step 4: Identify and extract the final answer

Question for Exchange Rates
Try yourself:
The exchange rate between US dollars (USD) and British pounds (GBP) is 1 USD = 0.75 GBP. If you have 100 USD, how many British pounds would you have?
View Solution

The document Exchange Rates | Mathematics for GCSE/IGCSE - Year 11 is a part of the Year 11 Course Mathematics for GCSE/IGCSE.
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FAQs on Exchange Rates - Mathematics for GCSE/IGCSE - Year 11

1. What factors influence exchange rates?
Ans. Exchange rates are influenced by a variety of factors including interest rates, inflation, political stability, economic performance, and market speculation.
2. How do exchange rates affect international trade?
Ans. Exchange rates play a crucial role in determining the competitiveness of a country's exports and imports. A strong currency can make exports more expensive and imports cheaper, while a weak currency can have the opposite effect.
3. Can exchange rates impact tourism?
Ans. Yes, exchange rates can have a significant impact on tourism. A strong domestic currency can make traveling abroad more expensive for tourists, while a weaker currency can attract more visitors due to lower costs.
4. How do central banks intervene in exchange rate markets?
Ans. Central banks can intervene in exchange rate markets by buying or selling their own currency to influence its value. This is often done to stabilize the currency or counteract excessive volatility.
5. What is the difference between fixed and floating exchange rate systems?
Ans. In a fixed exchange rate system, the value of a currency is pegged to another currency or a basket of currencies, while in a floating exchange rate system, the value is determined by market forces. Each system has its own advantages and disadvantages.
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