Foreign Exchange

FOREIGN EXCHANGE

Foreign Exchange
Table of Contents
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6.....................................................................................................................................................16
References......................................................................................................................................17
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Foreign Exchange
1. Indicate how each of the following transactions affects the private demand/supply for
pounds sterling in the $-£ market. Write "INC" for an increase, "DEC" for a decrease,
"APPREC" for appreciation, "DEPREC" for depreciation, and "X" for no change.
Transaction Demand Supply Price Price
for £ of £ of £ of $
Increase in number of
British tourists to U.S. X INC Deprec Apprec
Decrease in number of
U.S. tourists to U.K. DEC X Deprec Apprec
Increased US demand for
services of British
insurance companies INC X Apprec Deprec
Increased US demand for
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Foreign Exchange
British gov't bonds INC X Apprec Deprec
Rumor of defects in
Rolls Royce cars DEC X X X
Incentives for British
direct investment in US X INC Deprec Apprec
Decreased British
purchases of U.S. corn X DEC Apprec Deprec
3