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. TransactionDemandSupplyPricePrice for £of £of £of $ Increase in number of British tourists to U.S.XINCDeprecApprec Decrease in number of U.S. tourists to U.K.DECXDeprecApprec Increased US demand for services of British insurance companiesINCXApprecDeprec Increased US demand for 2
Foreign Exchange British gov't bondsINCXApprecDeprec Rumor of defects in Rolls Royce carsDECXXX Incentives for British direct investment in USXINCDeprecApprec Decreased British purchases of U.S. cornXDECApprecDeprec 3
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