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- Subject
- Macroeconomic Issues and Analysiseconomics-mcqs › macroeconomic-issues-and-analysis
- Published
- 31 May 2019
- Last updated
- 28 May 2026
What happens to the value of the pound when the $/£ exchange rate increases, and what occurs when the $/£ exchange rate decreases?
Multiple choice question for Macroeconomic Issues and Analysis. Select an option, then review the explanation below.
Explanation
When the $/£ exchange rate goes up, the pound becomes stronger (appreciates), and when the exchange rate declines, the pound weakens (depreciates).
More Macroeconomic Issues and Analysis MCQs
Practice related questions from the same subject.
- 1.Which of the following is NOT considered an advantage of the single market?
- 2.Within the European Exchange Rate Mechanism (ERM), each member country maintained a fixed exchange rate, and together the group ________ in relation to other countries worldwide?
- 3.In a country with a floating exchange rate system, what is the likely effect on its currency if its inflation rate exceeds that of its trading partners?
- 4.In a floating exchange rate system, how do expectations of rising interest rates typically affect the currency's exchange rate?
- 5.How does a fixed exchange rate combined with full capital mobility affect the effectiveness of monetary policy?