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Each month, the Sports Exports Company (a U.S. firm) receives an order for footballs from different British sporting goods distributors. The monthly payment for the

Each month, the Sports Exports Company (a U.S. firm) receives an order for footballs from different British sporting goods distributors. The monthly payment for the footballs is denominated in British pounds, as requested by the British distributor. Jim Logan, owner of the Sports Exports Company, must convert the pounds received into dollars.

1. Explain how a higher level of inflation in UK affect Sports Exports Company (assume U.S, inflation remains constant.

2. How could a decreasing level of national income in UK affect Sports Exports Company?

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