If American demand for purchases of British goods has decreased, how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically

What will be an ideal response?


If Americans are demanding fewer British goods, they will trade fewer dollars in the foreign exchange market for British pounds. This decrease in the supply of dollars is represented by the shift to the left in the supply of dollars below. As the supply of dollars decreases, the equilibrium exchange rate rises (the dollar appreciates).

Economics

You might also like to view...

Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $7, we would expect that

A) supply will increase until quantity demanded equals quantity supplied. B) price will increase until quantity demanded equals quantity supplied. C) demand will decrease until quantity demanded equals quantity supplied. D) there will be no change in the price since the market is in equilibrium.

Economics

The figure above shows the market for tires. According to the figure, the government collects ________ per month in total tax revenue

A) $600 million B) $1,200 million C) $2,000 million D) $900 million E) None of the above answers is correct.

Economics

Up to which point will a perfectly competitive firm continue to invest? Explain carefully

What will be an ideal response?

Economics

A tradable government permit for the atmospheric release of a ton of sulfur dioxide can help reduce acid rain

a. True b. False Indicate whether the statement is true or false

Economics