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[Related to the Making the Connection] An article in the New York Times discussed the consequences in financial markets of Brexit, the vote in a
[Related to the Making the Connection] An article in the New York Times discussed the consequences in financial markets of Brexit, the vote in a 2016 referendum in the United Kingdom to leave the European Union: investors have dumped much that seems risky - the pound, the euro and shares on stock exchanges around the world. They have entrusted the proceeds to that rare sure thing, United States Treasury bills. The article described this process as a flight to safety. S 2 D1 Source: Peter S. Goodman, Taking Refuge in Dollar Could Expose World Economy to New Perils, New York Times, July 1, 2016. Exchange rate (pounds/dollar) Aflight to safety is a shift in investments where investors seek to assets perceived as risky and assets perceived as safe. How would the flight to safety affect the exchange rate between the pound and the U.S. dollar? Illustrate your answer by using the line tool to show the effect on the demand and supply graph using the market for U.S. dollars in exchange for British pounds. Using the line drawing tool, draw the new curve to show the effect on the demand and supply which shows the market for U.S. dollars in exchange for British pounds. Properly label the line. Carefully follow the instructions above, and only draw the required object. [Related to the Making the Connection] An article in the New York Times discussed the consequences in financial markets of Brexit, the vote in a 2016 referendum in the United Kingdom to leave the European Union: investors have dumped much that seems risky - the pound, the euro and shares on stock exchanges around the world. They have entrusted the proceeds to that rare sure thing, United States Treasury bills. The article described this process as a flight to safety. S 2 D1 Source: Peter S. Goodman, Taking Refuge in Dollar Could Expose World Economy to New Perils, New York Times, July 1, 2016. Exchange rate (pounds/dollar) Aflight to safety is a shift in investments where investors seek to assets perceived as risky and assets perceived as safe. How would the flight to safety affect the exchange rate between the pound and the U.S. dollar? Illustrate your answer by using the line tool to show the effect on the demand and supply graph using the market for U.S. dollars in exchange for British pounds. Using the line drawing tool, draw the new curve to show the effect on the demand and supply which shows the market for U.S. dollars in exchange for British pounds. Properly label the line. Carefully follow the instructions above, and only draw the required object
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