Sub-part
A
the supply and demand curves for pounds are to be drawn and the equilibrium exchange rate is to be determined.
Concept Introduction:
The exchange rate helps to determine the value of one currency in terms of some other foreign currency. This exchange rate is required to carry out international trade. This exchange rate is determined by the supply and demand for a particular currency in the market. This exchange rate highly affects the balance of payments account especially the trade balance. A higher exchange rate means imports become cheaper and a lower exchange rate increases the exports.
Sub-Part
B
the new supply curve when the supply of pounds gets doubled.
Concept Introduction:
The exchange rate helps to determine the value of one currency in terms of some other foreign currency. This exchange rate is required to carry out international trade. This exchange rate is determined by the supply and demand for a particular currency in the market. This exchange rate highly affects the balance of payments account especially the trade balance. A higher exchange rate means imports become cheaper and a lower exchange rate increases the exports.
Sub-Part
C
the new equilibrium exchange rate.
Concept Introduction:
The exchange rate helps to determine the value of one currency in terms of some other foreign currency. This exchange rate is required to carry out international trade. This exchange rate is determined by the supply and demand for a particular currency in the market. This exchange rate highly affects the balance of payments account especially the trade balance. A higher exchange rate means imports become cheaper and a lower exchange rate increases the exports.
Sub-Part
D
whether there is an appreciation or
Concept Introduction:
The exchange rate helps to determine the value of one currency in terms of some other foreign currency. This exchange rate is required to carry out international trade. This exchange rate is determined by the supply and demand for a particular currency in the market. This exchange rate highly affects the balance of payments account especially the trade balance. A higher exchange rate means imports become cheaper and a lower exchange rate increases the exports.
Sub-Part
E
the effect on the U.S imports of British goods.
Concept Introduction:
The exchange rate helps to determine the value of one currency in terms of some other foreign currency. This exchange rate is required to carry out international trade. This exchange rate is determined by the supply and demand for a particular currency in the market. This exchange rate highly affects the balance of payments account especially the trade balance. A higher exchange rate means imports become cheaper and a lower exchange rate increases the exports.
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