Economics 0455 · IGCSE · Foreign exchange rates

Foreign exchange rates — practice question

The table gives the average exchange rate for the UK pound (£) against the US dollar ($), meaning the number of $ that may be obtained with £$1$. What is one likely effect of this change on the UK economy?

  • Adecreased cost-push inflation
  • Bdecreased current account deficit
  • Cincreased quantity of imports
  • Dincreased trade deficit

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