Question

If the British pound depreciates against the U.S.​ dollar,

A. British consumers gain by a decrease in the pound price of U.S. exports to Britain.
B. British businesses gain by an increase in the dollar price of exports to the United States.
C. U.S. consumers lose by an increase in the dollar price of British exports to the United States.
D. British consumers lose by an increase in the pound price of U.S. exports to Britain.

Answer 1

Answer: The correct answer is D: British consumers lose by an increase in the pound price of U.S. exports to Britain.

Step-by-step explanation:

If the price of U.S. exports to Britain increases, consumer's purchasing power is affected. The price of the products increases considerably and the consumers are unable to buy as they want. Indeed, import taxes increase as well, affecting even more customers' economic capacity. The depreciation of the local currency against the U.S. dollar is a serious problem that affects the economic development of a country.