Suppose that the exchange rate between British pounds and U.S. dollars is originally $2.50 per pound. If it then changes to $3 for 1 pound, the price of U.S. goods to British importers will:

Question

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When the exchange rate changes from $2.50 to $3 for 1 pound, it means that the pound has appreciated relative to the dollar. As a result, British importers need to spend fewer pounds to purchase the same amount of goods in dollars, making U.S. goods cheaper for them.

Suppose That the Exchange Rate Between British Pounds and U