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- Subject
- Budget Deficits And The Trade Balanceeconomics-mcqs › budget-deficits-and-the-trade-balance
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
If political turmoil causes Russians to shift their investments from Russian assets to those in the UK, what is the likely impact on the British pound's value and the UK's net export levels?
Multiple choice question for Budget Deficits And The Trade Balance. Select an option, then review the explanation below.
Explanation
When foreign investors increase demand for UK assets, the British pound tends to appreciate due to higher demand. However, a stronger pound makes UK exports more expensive abroad, leading to a decline in net exports.
More Budget Deficits And The Trade Balance MCQs
Practice related questions from the same subject.
- 1.Which economic policy is expected to produce effects contrary to those of an export subsidy?
- 2.Which of these groups would gain no advantage from an EU import quota on Japanese automobiles?
- 3.Which of the following statements regarding a nation's trade policy is accurate?
- 4.If, due to political turmoil, Russian investors decide to buy more UK assets instead of Russian ones, what is the impact on the UK's net foreign investment?
- 5.If the European Union enforces a quota limiting the import of clothing made in China, thereby reducing the UK's clothing imports, which statement accurately describes the impact on the foreign exchange market for the British pound?