1. GCSE Business Studies The impact of Exchange Rates Beauchamps High School

2. Will be able to evaluate the importance of exchange rates in costs of a business Evaluation ~ GCSE Grade A* Will be able to propose factors that affect the value of a currency Synthesis ~ GCSE Grade A Will be able to analyse the effect of exchange rates on a business Analysis ~ GCSE Grade B Will be able to demonstrate understanding by using examples/cases Application ~ GCSE Grade C Will be able to explain the importance of exchange rates for a business Comprehension ~ GCSE Grade D Will be able to recall key term exchange rate Knowledge ~ GCSE Grade E

3. Exchange Rates Beauchamps High School Theory Notes Price of buying foreign currency. It tells you how much of the foreign currency you will get for every pound

4. Importance for business  Buying raw materials and selling products from foreign countries  Imports  Exports Beauchamps High School Theory Notes

5. Imports  Purchase of a good or service from a foreign business that leads to a flow of money out of the UK  UK buyer will have to change pounds into the seller’s currency to make the transaction Can you think of any examples of imports? Beauchamps High School Theory Notes

6. Exports  Sale of good or service to a foreign buyer that leads to a flow of money into the UK  Foreign buyer will have to change their currency into pounds to complete the transaction Can you think of any examples of exports? Beauchamps High School Theory Notes

7. Calculating Exchange Rates  RULE 1:  When exchanging from £s to a foreign currency, MULTIPLY  E.g £1 = $1.80  £200 Burberry jacket should sell in New York for £200 x $1.80 = $360 Beauchamps High School Theory Notes

8. Calculating Exchange Rates  RULE 2:  When exchanging from a foreign currency to £s, DIVIDE  E.g £1 = $1.80  $900 Calvin Klein suit should sell in Britain for $900 / $1.80 = £500 Beauchamps High School Theory Notes

9. Changes in exchange rates  The exact price of foreign currencies goes up and down on a minute-by-minute basis  The fall and rise in the value of the pound can impact on small businesses Beauchamps High School

10. The effects of Exchange Rate changes Strong Pound  £1 = 2 euros (€)  Good for British travelling abroad  Bad for UK business exporting to Euro zone  Good for importing from Euro zone Weak Pound  £1 = 1 euro (€)  Good for foreign tourists  Good for Uk business exporting to Euro zone  Bad for importing from Euro zone Theory Notes

11. The effects of Exchange Rate changes  In order to remember the effect that a change in exchange rates has use the following acronym S trong P ound I mports C heap E xports D ear Theory Notes

12. Other factors that will affect the value of a currency  Demand and supply for the currency  Interest rates – rising interest rates is more attractive. Falling interest rates decreases value

13. Against the Clock

14. Task Beauchamps High School

15. Task  Watch the video:  http://news.b bc.co.uk/1/hi /england/77 92356.stm Beauchamps High School

16. Homework  Research task – investigate exchange rates over last 5 years – Pound/Euro and Pound/Dollar – create graph showing pattern  Write a paragraph for each explain the graphs show and which businesses would benefit from the changes Beauchamps High School

17.  www.businessstudiesonline.co.uk/live/index.php?option=c om_content&view=article&id=5&Itemid=10 www.businessstudiesonline.co.uk/live/index.php?option=c om_content&view=article&id=5&Itemid=10 Beauchamps High School

18. Plenary

19. The Chase rules  One student selected to answer a question from lollipop sticks  If a student is unable to answer a question they can select someone else to answer “The Chaser”  Can you beat the chaser and get the high grade!

20. Recall the key term exchange rate Explain the importance of exchange rates for a business Demonstrate understanding by using examples/cases Analyse the effect of exchange rates on a business Propose factors that affect the value of a currency Evaluate the importance of exchange rates in costs of a business Can you…..

21. Will be able to evaluate the importance of exchange rates in costs of a business Evaluation ~ GCSE Grade A* Will be able to propose factors that affect the value of a currency Synthesis ~ GCSE Grade A Will be able to analyse the effect of exchange rates on a business Analysis ~ GCSE Grade B Will be able to demonstrate understanding by using examples/cases Application ~ GCSE Grade C Will be able to explain the importance of exchange rates for a business Comprehension ~ GCSE Grade D Will be able to recall key term exchange rate Knowledge ~ GCSE Grade E