Suppose that last year it cost 1000 British pounds to buy a Canadian-made bicycle from Canada. Due to changes in the currency exchange rate, a few months later the same bicycle cost only 800 British pounds to purchase. What will be the likely result of this change?
A) increased number of exports of these bicycles to Canada
B) increased number of imports of these bicycles to Great Britain
C) decreased number of imports of these bicycles to Great Britain
D) decreased number of exports of these bicycles to Canada

Question

Quizplus · Accepted Answer

The decrease in the cost of the Canadian-made bicycle in British pounds makes it cheaper for British consumers to buy them, resulting in an increased demand for imports of these bicycles to Great Britain.

Suppose That Last Year It Cost 1000 British Pounds to Buy