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Consider the market to exchange British pounds for dollars. The demand curve for British pounds slopes downwards because a reduction in the exchange rate (E

Consider the market to exchange British pounds for dollars. The demand curve for British pounds slopes downwards because a reduction in the exchange rate (E $/pound) makes

a.

British goods cheaper in the U.S., increasing U.S. imports from Britain

b.

American goods more expensive in Britain, decreasing U.S. exports to Britain

c.

Both A and B

d.

None of the above

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