We appreciate your visit to Suppose that the price of sterling in terms of the dollar has risen over a 12 month period What would you expect the effects of. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
A rise in the sterling: dollar exchange rate over a 12-month period may lead to a potential decrease in UK prices, an improvement in the balance of trade, and an increase in the UK capital account.
(vi) An increase in the price of sterling in terms of the dollar implies that the pound has strengthened relative to the dollar. This could lead to a decrease in the general level of prices in the UK. A stronger pound makes imported goods cheaper, which can put downward pressure on prices as businesses may reduce their prices to remain competitive.
(vii) A rise in the sterling: dollar exchange rate can have a positive impact on the UK balance of trade. A stronger pound makes UK exports relatively more expensive for foreign buyers, which could potentially decrease export levels. However, it also makes imports cheaper, which may lead to an increase in imports. The net effect on the balance of trade will depend on the elasticity of demand for exports and imports.
(viii) An increase in the sterling: dollar exchange rate can result in an increase in the UK capital account. A stronger pound makes UK assets more attractive to foreign investors, leading to an inflow of capital into the country. Foreign investors may find it beneficial to purchase UK assets as they can get more pounds for their currency, potentially boosting the UK capital account.
Learn more about capital account here:
https://brainly.com/question/30199543
#SPJ11
Thanks for taking the time to read Suppose that the price of sterling in terms of the dollar has risen over a 12 month period What would you expect the effects of. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!
- Why do Businesses Exist Why does Starbucks Exist What Service does Starbucks Provide Really what is their product.
- The pattern of numbers below is an arithmetic sequence tex 14 24 34 44 54 ldots tex Which statement describes the recursive function used to..
- Morgan felt the need to streamline Edison Electric What changes did Morgan make.
Rewritten by : Barada
