If the British pound (£)appreciates by 10% against the dollar:
A) both the US importers from Britain and US exporters to Britain will be helped by the appreciating pound.
B) the US exporters will find it harder to sell to foreign customers in Britain.
C) the US importer of British goods will tend to find that their cost of goods rises,hurting its bottom line.
D) both US importers of British goods and exporters to Britain will be unaffected by changes in foreign exchange rates.
E) all of the above.

Question

Quizplus · Accepted Answer

When the British pound appreciates by 10% against the dollar, it becomes more expensive for US importers to buy goods from Britain, leading to a rise in the cost of goods and hurting their bottom line. On the other side, the US exporters to Britain will find it harder to sell to foreign customers since their products become relatively more expensive in Britain. Therefore, option A and B are incorrect. Option D is also incorrect because changes in foreign exchange rates affect both importers and exporters.

If the British Pound (£)Appreciates by 10% Against the Dollar