Use the Graph Below to Answer Questions 9-11

question 51

Multiple Choice

Use the graph below to answer questions 9-11.
Figure 2.3:
-Refer to Figure 2.3.Suppose that the spot exchange rate of British pound is $2.00 per pound.Suppose that the U.S.decreases its imports from the U.K.Under flexible exchange rate system,the Bank of England will:

• A) let the British pound appreciates
• B) let the British pound depreciates
• C) sell pounds and buy dollars in foreign exchange market.
• D) sell dollars and buy pounds in foreign exchange market.

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