The U.K.'s demand for New Zealand goods will decline.
When the U.K. pound sterling appreciates relative to the New Zealand dollar, it becomes more expensive for the U.K. to import goods from New Zealand. This increase in price may lead to a decrease in demand for New Zealand goods as they become relatively more expensive for U.K. consumers.
The United Kingdom currently has a trade deficit with New Zealand. If the U.K. pound sterling appreciates relative to the New Zealand dollar, which of the following correctly explains the effect on the U.K.'s demand for goods from New Zealand?(1 point)
Responses
The U.K.'s demand for New Zealand goods will rise.
The U.K.'s demand for New Zealand goods will rise.
The U.K.'s demand will remain the same.
The U.K.'s demand will remain the same.
The U.K.'s demand for New Zealand goods can't be determined.
The U.K.'s demand for New Zealand goods can't be determined.
The U.K.'s demand for New Zealand goods will decline.
1 answer