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?

Show Answers

The British pound strengthens, and the UK's net exports increaseThe British pound strengthens, and the UK's net exports decreaseThe British pound weakens, and the UK's net exports increaseThe British pound weakens, and the UK's net exports decreaseNo significant change in the pound's value or net exports

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.