Final answer:
The question primarily concerns Mathematics, specifically depreciation and inflation. A car depreciating by 12% would be worth £12,320 after losing value. Inflation rates can be calculated using price indices with different base years and may differ based on the base year selected.
Step-by-step explanation:
The question deals with the concept of depreciation, which is a type of calculation within the field of Mathematics often applied in financial and business contexts. When a car worth £14,000 depreciates by 12%, it loses 12% of its value. To calculate the new value after depreciation, we can multiply the original price by the percentage that represents the remaining value (100% - 12% = 88%).
So, the calculation is as follows: £14,000 * 88% = £14,000 * 0.88 = £12,320. This means after a 12% depreciation, the car is now worth £12,320.
Regarding currency exchange, if the value of the pound rises against the dollar, as seen in the provided example where the pound rises to $2.00 per pound, the cost of goods or assets in the UK as expressed in dollars would be less expensive for those holding dollars. A weaker dollar indeed makes U.S. exports more competitively priced.
The discussion about inflation rates and the use of different base years for price indices is an important aspect of understanding how the value of goods and services change over time. By calculating price indices using different base years, we can observe the relative change in prices, which helps in measuring inflation. This calculation uses a standard formula for calculating price indices and inflation rates:
- Price index with year 1 as the base: ((Price in current year / Price in base year) * 100)
- Price index with year 4 as the base: ((Price in base year / Price in current year) * 100)
- Inflation rate: ((Price index at the end of the period - Price index at the start of the period) / Price index at the start of the period) * 100