Explain what the possible results could be from increasing the Euro/US dollar exchange rate (you are Euro)

When the exchange rate EU/US goes up, (1/5 becomes 1/10) the euro becomes worth less. If they euro is worth less, European products become cheaper to the US, potentially stimulating exports, while US products become more expensive for Europe, potentially decreasing imports. The EU might be able to alter its current balance and increase its overall GDP.

Can also look into the effects of exchange rates on interest and inflation!

MV
Answered by Merle V. Economics tutor

2361 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

A small, independent fast-food shop is considering whether or not to introduce a new machine to speed up production. The machine would be able to produce burgers to order and enable the production of burgers to be split into different stages so that each


Explain one negative externality that could occur due to the building of a new airport.


What factors can shift the demand curve in a market?


Explain how exchange rates are determined in a floating exchange market


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning