Exchange Rates MCQ 2

Questions and Answers

It remains unchanged as the price of exports is unaffected.

It becomes unstable and fluctuates constantly.

It increases as exports become cheaper in other countries. (correct)

It decreases as exports become more expensive.

It increases as essential raw materials become more expensive. (correct)

It remains the same as the cost of production is unaffected.

It decreases as imports become cheaper.

It becomes unstable and fluctuates constantly.

It decreases as tourists from foreign countries find Ireland more expensive.

It becomes unstable and fluctuates constantly.

It increases as tourists from foreign countries find Ireland cheaper. (correct)

It remains unchanged as tourism is unaffected by currency fluctuations.

It becomes more expensive to repay. Signup and view all the answers

An increase in economic growth as exports and tourism rise. Signup and view all the answers

An increase in employment opportunities Signup and view all the answers

An increase in price Signup and view all the answers

It becomes more expensive to repay Signup and view all the answers

An increase in economic growth Signup and view all the answers

Their money goes further in Ireland Signup and view all the answers

Study Notes

A weaker euro makes eurozone exports cheaper in other countries, increasing demand and potentially leading to higher employment in exporting firms.
Foreign imports become more expensive, resulting in decreased demand, but essential raw materials still need to be imported, increasing production costs for Irish firms.
Tourism in Ireland from foreign countries increases as a weaker euro makes holidays cheaper for tourists, for example, Americans get more value for their dollars.
External debt becomes more expensive to repay as the euro depreciates, making it costlier to repay loans in foreign currencies.
A weakening currency can stimulate economic growth through boosted exports and tourism, but also risks inflation due to higher import prices.

A weaker euro makes eurozone exports cheaper in other countries, increasing demand and potentially leading to higher employment in exporting firms.
Foreign imports become more expensive, resulting in decreased demand, but essential raw materials still need to be imported, increasing production costs for Irish firms.
Tourism in Ireland from foreign countries increases as a weaker euro makes holidays cheaper for tourists, for example, Americans get more value for their dollars.
External debt becomes more expensive to repay as the euro depreciates, making it costlier to repay loans in foreign currencies.
A weakening currency can stimulate economic growth through boosted exports and tourism, but also risks inflation due to higher import prices.