When the British Pound Rises in Value Relative to Other

question 48

Multiple Choice

When the British pound rises in value relative to other currencies,then

• A)goods imported into Britain rise in price.
• B)British exports rise in price.
• C)neither British exports nor imports rise in price.
• D)both British exports and imports rise in price.

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Definitions:

Free-rider Problem

A situation in which some individuals consume more than their fair share of a public resource, or shoulder less of the cost of its production, benefiting from goods or services without paying for them.

Nonexcludable Problem

An issue characteristic of public goods, where it is not possible to prevent individuals who do not pay from consuming a good or service.

Optimal Level

The most favorable or efficient level of output or activity under given conditions, maximizing benefits or minimizing costs.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use does not diminish another's.