Future Business Leaders of America (FBLA) Agribusiness Practice Test

What trend did the strong pound until 2008 have on agricultural exports?

1. Increased exports of all agricultural products

2. Decreased competitiveness in international markets

3. Enhanced the value of subsidies

4. Encouraged domestic production

The correct answer is: Decreased competitiveness in international markets

A strong pound until 2008 made agricultural exports from the UK relatively more expensive for foreign buyers. This means that the prices of British agricultural products in international markets were higher compared to those from countries with weaker currencies. As a result, UK agricultural products became less competitive in terms of pricing when competing with goods from other nations. This decrease in competitiveness negatively impacted the volume of agricultural exports, as foreign consumers tended to favor cheaper alternatives. Understanding the context of the currency fluctuations helps clarify why this trend is significant. A strong currency usually indicates a robust domestic economy but can lead to adverse effects on exports, particularly in price-sensitive sectors such as agriculture. While the other options touch on various aspects of agricultural economics, they do not accurately reflect the direct impact of a strong pound on export performance.