Use the Graph Below to Answer Questions 9-11

question 8

Multiple Choice

Use the graph below to answer questions 9-11.
Figure 2.3:
-Refer to Figure 2.3.Suppose that the U.K agreed to peg its currency against the U.S.dollar at $2.00 per pound during the Bretton Woods system.Assume that the U.S.decreases its imports from the U.K.As a result,the Bank of England would have to:

• 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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Definitions:

Creditors

Individuals or entities to whom a company owes money or has financial obligations, typically arising from purchase of goods or services on credit.

Accounts Payable

A liability account tracking money owed by a business to suppliers or creditors for goods and services received.

Revenue Account

An account that records sales, services, or other income earned by a business.

Asset Account

Accounts on a balance sheet that represent the resources owned by a company, which are expected to provide future economic benefits.