Suppose U.S. consumers start buying more English shoes and fewer American shoes. Which of the following will be a likely impact on the foreign exchange market?
A) U.S. demand for British pounds will increase.
B) U.S. demand for British pounds will decrease.
C) U.S. demand for British pounds will increase, but the demand for foreign exchange will decrease.
D) U.S. demand for British pounds will decrease, but the demand for foreign exchange will increase.
E) There would be no effect on the demand for foreign exchange in the United States.
Correct Answer:
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