CAIE IGCSE Business Studies 6.2.4 exchange rates
Practise exchange-rate questions by defining currency changes, applying import-cost effects and judging importance in a case.
- Syllabus
- 2027–2029
- Course
- Business 0264
Exam points
- Define depreciation as a currency falling in value against another currency.
- Explain how appreciation or depreciation changes import costs and export competitiveness.
- Justify whether exchange rates matter more than quality, supplier reliability or quotas.
6.2.4—Exchange rates question 1
[Maximum number: 2]
NSL is a business based in country X．It manufactures food products including bread and breakfast cereals．NSL uses lean production in its factory．Maintaining quality is important．NSL imports 15% of its raw materials．Changes in country X＇s exchange rate can affect businesses which import raw materials．NSL＇s Marketing Manager knows the business should respond to changes in consumer spending patterns．She is aware that market research can be used to help make business decisions．
（a）Identify one way each of the following changes in country X＇s exchange rate might affect businesses which import raw materials．
Depreciation：
Appreciation：
Identify one way each of the following changes in country X's exchange rate might affect businesses which import materials.
Award 1 mark for each way (max 2).
Points might include:
- Depreciation: Imports dearer/more expensive
- Appreciation: Imports cheaper
Only award the first two responses given.
Do not award answers about the effect on exports.
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