Economics 2281 · O Level · Foreign exchange rates

Foreign exchange rates — practice question

The table gives the average exchange rate of the UK pound (£) against the US dollar ($), meaning how many $ can be purchased with £1. What is a likely consequence of this change for the UK economy?

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

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