All else equal, a depreciation of the British pound relative to currencies such as the euro and the Canadian dollar should ________ British exports and ________ imports to Great Britain.
A)increase; increase
B)increase; decrease
C)decrease; increase
D)decrease; decrease

Question

Quizplus · Accepted Answer

A depreciation of the British pound makes British goods cheaper for foreign buyers, increasing exports. Conversely, it makes foreign goods more expensive for British consumers, decreasing imports.

All Else Equal, a Depreciation of the British Pound Relative