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

2535 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

What are negative externalities, and what policies can the government implement to reduce them?


The elasticity of supply of frozen pizzas is likely to be more elastic than the supply of fresh vegetables. Do you agree with this statement?


What is demand and supply elasticity?


Explain two causes of a shift of a supply curve to the right.


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:

© 2026 by IXL Learning