Refer to the table below and answer the questions that follow - NSC Tourism - Question 3 - 2023
Question 3
Refer to the table below and answer the questions that follow.
EXCHANGE RATES
COUNTRY CURRENCY CODE BBR BSR
United Kingdom GBP 21,9... show full transcript
Worked Solution & Example Answer:Refer to the table below and answer the questions that follow - NSC Tourism - Question 3 - 2023
Step 1
Do you think the rand was strong or weak against the two major currencies above?
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Answer
The rand was weak against the two major currencies above.
Step 2
Give ONE reason for your answer.
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Answer
The reason is that the exchange rates indicate that more rands are required to purchase either the GBP or USD, reflecting a weakness in the rand's value.
Step 3
Explain THREE possible reasons why Gordon's grandmother insisted that she should buy the bicycle in South Africa.
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Answer
Local Availability: Bicycles may be more readily available in South Africa, ensuring that her granddaughter could find the specific model easily.
Cost-Effectiveness: Purchasing the bicycle in South Africa may have been more economical, considering shipping costs and import duties that apply to foreign goods.
Support Local Economy: Buying locally supports the South African economy, promoting sustainable practices and assisting local businesses.
Step 4
Explain the term buying power.
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Buying power refers to the amount of goods and services that a unit of currency can purchase in a given economy. It is an important measure as it influences consumer behavior and indicates the value of money in terms of purchasing capacity.
Step 5
Calculate the amount Gordon had in rand to buy a new bicycle in South Africa.
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Answer
To convert GBP to rand, use the formula:
extAmountinRand=extGBPAmountimesextExchangeRate
Given that Gordon received GBP 3,000 and the exchange rate is 21.98, the calculation is:
extAmountinRand=3000imes21.98=65,940.00extRand
Thus, Gordon had R65,940.00 available to purchase the bicycle.
