The United Kingdom produces computers and sells them to Japan. At the same time Japan produces cars and sells them to the United Kingdom. Suppose there is an appreciation in the pound. This will cause:
A. An increase in imports into the United Kingdom and an increase in exports to Japan, which will cause an increase in aggregate demand and real GDP.
B. A decrease in imports into the United Kingdom and an increase in exports to Japan, which will cause an increase in aggregate demand and real GDP.
C. An increase in imports into the United Kingdom and a decrease in exports to Japan, which will cause a decrease in aggregate demand and real GDP.
D. A decrease in imports into the United Kingdom and a decrease in exports to Japan, which will cause a decrease in aggregate demand and real GDP.
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The United Kingdom produces computers and sells them to Japan. At the same time Japan produces cars...
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