Which statement describes the effect of a weak pound?

Which statement describes the effect of a weak pound?

• A. Exports can be more expensive for foreign buyers.
• B. Imports become cheaper, reducing costs for domestic producers.
• C. Exports can be more attractive to foreign buyers.
• D. Domestic consumers face higher prices for goods.

Answer: (C)

When the pound weakens, the price of UK goods in foreign currencies falls, making UK exports cheaper and more attractive to buyers abroad. This happens because a weaker pound means foreign buyers get more pounds per unit of their currency, so a product priced in pounds costs less in their currency. That’s why the statement that exports can be more attractive to foreign buyers is the best description of the effect. Note that imports become more expensive for domestic consumers when the pound is weak, which can raise domestic prices overall. The other statements misstate the immediate effect on export prices or describe a consequence rather than the core impact on export competitiveness.

When the pound weakens, the price of UK goods in foreign currencies falls, making UK exports cheaper and more attractive to buyers abroad. This happens because a weaker pound means foreign buyers get more pounds per unit of their currency, so a product priced in pounds costs less in their currency. That’s why the statement that exports can be more attractive to foreign buyers is the best description of the effect.

Note that imports become more expensive for domestic consumers when the pound is weak, which can raise domestic prices overall. The other statements misstate the immediate effect on export prices or describe a consequence rather than the core impact on export competitiveness.