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.

---

Definitions:

Equity Loan

A type of loan in which the borrower uses the equity of their home as collateral.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage rate.

Relative Frequency

The ratio of the number of times an event occurs to the total number of trials or observations.

Subjective

Rooted in or swayed by one's own emotions, preferences, or views.