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On July 1, 2013, the exchange rate between the British Pound (GBP) and the US dollar (USD) was 1.5169 USD/GBP. Five months later, on December

On July 1, 2013, the exchange rate between the British Pound (GBP) and the US dollar (USD) was 1.5169 USD/GBP. Five months later, on December 1, 2013 the rate was 1.6383 USD/GBP.

  1. (4 points) Over this time period, did the dollar appreciate or depreciate against the pound? Explain.
  2. (4 points) Consider an American export good priced at $100 on both dates. What was the GBP price of the good on both dates?
  3. (4 points) Consider a British export good priced at 100GBP on both dates. What was the US dollar price of that good on both dates?
  4. (3 points) How is the change in the GBP/USD exchange rate likely to affect US exports? US imports? US Net Exports?

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