The demand and supply of pounds are D2 and S2. An increase in British demand for U.S. exports, ceteris paribus, couldGroup of answer choicesincrease the exchange rate ($/pound) to $2.50.decrease the exchange rate ($/pound) to $1.50.decrease the equilibrium quantity from 400 to 300 pounds.increase the demand for pounds from D2 to D1.

Multiple Choice QuestionIf the same group of products costs 100,000 U.S. dollars and 50,000 British pounds, what would be the theoretical effect on the exchange rate between the two currencies?Multiple choice question.The difference in prices is not significant enough to have an impact on the exchange rate.The exchange rate should shift until it reaches the rate of two U.S. dollars equaling one British pound.The exchange rate should shift until it reaches the rate of one U.S. dollar equaling one British pound.The exchange rate should shift until it reaches the rate of one U.S. dollar equaling two British pounds.

Assume that the exchange rate between the dollar and the euro is​ €0.6 =​ $1. Suppose the exchange rate changes to​ €0.50 =​ $1. Because of the​ change: a. Australian exports should decrease and Australian imports should decrease. b. Australian exports should increase and Australian imports should decrease. c. Australian exports should increase and Australian imports should increase. d. Australian exports should decrease and Australian imports should increase.

Suppose that Great Britain is a major export market for your firm, a U.S.-based MNC. If the British pound depreciates against the U.S. dollar:(i) Your firm will be able to charge more in dollar terms while keeping pound prices stable.(ii) Your firm may be priced out of the U.K. market, to the extent that your dollar costs stay constant and your pound prices will rise.(iii) To protect U.K. market share, your firm may have to cut the dollar price of your goods to keep the pound price the same.

An increase in the U.S. dollar exchange rate means foreigners must payQuestion 17Answera.more for dollars and more for U.S. exports.b.less for dollars and more for U.S. imports.c.more for dollars and less for U.S. exports.d.less for dollars and less for U.S. exports.

Suppose 0.5 British pounds (£) trade for one (1) Australian dollar ($), the Australian price level equals $3.6 per good, and the British price level equals £2 per good.What is the real exchange rate in British goods per Australian good, rounded to two decimal points?a.0.90b.1.11c.0.56d.1.80