Assume it is June 1, 2016, and the exchange rate for U.S. dollars and British pounds is approximately $1.00 = £0.70. On June 23, 2016, the British voted to approve Brexit, removing the U.K. from the European Union. After the vote, on July 1, 2016, the exchange rate for U.S. dollars and British pounds increased to approximately $1.00 = £0.75. What effect will this have on the U.K.'s net exports?
Question 4 options:
The U.K.'s net exports will not change.
The U.K.'s net exports will increase.
The U.K.'s net exports could increase or decrease.
The U.K.'s net exports will decrease.