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, imports of British goods into the U.S. tend to:

Question

Quizplus · Accepted Answer

If the exchange rate increases to $3 for 1 pound, it means that the dollar has appreciated and is now stronger than before. This makes British goods more expensive for American consumers, leading to a decrease in demand for British imports and consequently, a fall in the imports.

Suppose That the Exchange Rate Between British Pounds and U