The Dollar demand relative to the Pound; value of imports and exports
Let the exchange rate be defined as the number of dollars per British pound. Assume there is an increase in U.S. interest rates relative to that of Britain.
a) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the pound?
b) Has the dollar appreciated or depreciated in value relative to the pound?
c) Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Great Britain? Illustrate by showing the price of a U.S. cell phone in Britain, before and after the change in the exchange rate.
d) If you had a business exporting goods to Britain, and U.S. interest rates rose as they have in this example, would you plan to expand production or cut back?
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more