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Use the Graph Below to Answer Questions 9-11

Question 3

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Use the graph below to answer questions 9-11.
Figure 2.3: Use the graph below to answer questions 9-11. Figure 2.3:   -Refer to Figure 2.3.Suppose that the spot exchange rate of British pound is $2.00 per pound.Suppose that the U.S.decreases its imports from the U.K.Under flexible exchange rate system,the Bank of England will: A)  let the British pound appreciates B)  let the British pound depreciates C)  sell pounds and buy dollars in foreign exchange market. D)  sell dollars and buy pounds in foreign exchange market.
-Refer to Figure 2.3.Suppose that the spot exchange rate of British pound is $2.00 per pound.Suppose that the U.S.decreases its imports from the U.K.Under flexible exchange rate system,the Bank of England will:


A) let the British pound appreciates
B) let the British pound depreciates
C) sell pounds and buy dollars in foreign exchange market.
D) sell dollars and buy pounds in foreign exchange market.

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