The Figure Given Below Illustrates the Market for British Pounds

question 28

Multiple Choice

The figure given below illustrates the market for British pounds. D_£ and S_£ are the demand and supply curves of the British pounds respectively. Who among the following groups will most likely benefit if the exchange rate is pegged at $2.50 per pound?

• A)The U.S.importers
• B)The British importers
• C)The British exporters
• D)The import-competing producers in the U.K.

---

Definitions:

Fourteenth Century

The period from the year 1301 to 1400, marking the late Middle Ages in European history, a time of significant social, political, and cultural change.

Encomienda System

A labor system in Spanish America granting colonists the right to demand tribute and forced labor from the indigenous inhabitants.

Tributary Indian Villages

Native American communities that were subjugated by colonial powers to pay tribute, either in goods or labor.

Conquistadors

The soldiers, explorers, and adventurers at the service of the Spanish and Portuguese Empires who established dominion over much of the Americas and Asia from the 15th to 17th centuries.