If the Dollar Per Pound Exchange Rate Falls from $1

question 24

Multiple Choice

If the dollar per pound exchange rate falls from $1.50 per pound to $1.25 per pound,______.

• A)U.S.imports of British goods will increase
• B)U.S.exports of goods to Great Britain will increase
• C)U.S.exports of services to Great Britain will fall because the price of the pound has increased
• D)British demand for American goods will remain unchanged,but American demand for British goods will fall
• E)U.S.demand for British goods will remain unchanged,but British demand for American goods will increase

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Definitions:

Technical Default

A failure to meet some specific terms of a loan agreement, lease, or another contract, other than the failure to make payments as and when they fall due.

Interest Payments

Payments made by a borrower to a lender, consisting of the cost of borrowing money over a period of time.

Principal Payments

Payments made towards the original amount borrowed in a loan, excluding interest payments, thereby reducing the outstanding principal balance.

Covenant Compliance

Refers to a borrower's adherence to the conditions set forth in loan agreements with lenders.