Exchange Rate
Price of one currency in terms of another.
Formula
Exchange Rate = Units of foreign currency per £1 (or vice versa)
Real World
When the pound fell sharply after the 2016 Brexit vote, Airbus warned that manufacturing costs in the UK became more expensive relative to its eurozone suppliers, threatening UK plant viability.
Exam Focus
Always state the direction of change and its effect on both exporters AND importers to access full marks.
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