The Brexit vote in June 2016 resulted in higher expected trade barriers. The relative expected return on British (pound)assets therefore ________ and so the quantity demanded of pound assets ________ at any given exchange rate,shifting the demand curve for pound assets to the ________.

Question

Quizplus · Accepted Answer

The Brexit vote led to expectations of higher trade barriers, which would likely decrease the attractiveness of British assets due to potential economic uncertainties and challenges. This decrease in attractiveness means the expected return on British (pound) assets fell, leading to a decline in the quantity demanded of pound assets at any given exchange rate. Consequently, the demand curve for pound assets would shift to the left.

The Brexit Vote in June 2016 Resulted in Higher Expected