Bruin Aircraft, Inc., is a designer and manufacturer of airplane parts. Its production plant is based in California. About one-third of its sales are exports to the United Kingdom.

Though Bruin invoices its exports in dollars, the demand for its exports is highly sensitive to the value of the British pound. In order to maintain its parts inventory at a proper level, it must forecast the total demand for its parts, which is somewhat dependent on the forecasted value of the pound. The treasurer of Bruin was assigned the task of forecasting the value of the pound (against the dollar) for each of the next 5 years. He was planning to request from the firm’s chief economist forecasts on all the relevant factors that could affect the pound’s future exchange rate. He decided to organize his worksheet by separating demand-related factors from the supply-related factors, as illustrated by the headings below:

Help the treasurer by identifying the factors in the first column and then checking the second or third (or both) columns. Include any possible government-related factors and be specific (tie your description to the specific case background provided here).

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Factors that can affect the value of the pound Check () here if the factor influences the U.S. demand for pounds Check () here if the factor influences the supply of pounds for sale