Exchange Rate
Price of one currency in terms of another.
Formula
Exchange Rate Impact on Exporters: Revenue (£) = Foreign Price × (1 / Exchange Rate)
Real World
When the pound fell sharply after the 2016 Brexit vote, Jaguar Land Rover's export revenues rose in sterling terms, temporarily boosting profits despite unchanged euro prices on the continent.
Exam Focus
Always state the direction of the exchange rate change first, then chain the effect through to import costs or export competitiveness — never skip steps.
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