The Brexit vote in June 2016 resulted in higher expected trade barriers . Therefore,the expected value of the pound would be ________ in the future. The result was the sharp ________ in the equilibrium exchange rate for the British pound.

Question

Quizplus · Accepted Answer

Higher expected trade barriers would result in a higher cost for trade and therefore lower demand for British products, leading to a lower expected value of the pound in the future. The sharp fall in the equilibrium exchange rate for the British pound reflects this expectation.

The Brexit Vote in June 2016 Resulted in Higher Expected