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Suppose that the exchange rate for the Euro against the US dollar is Euro 1 = $1, and the £ sterling-US dollar exchange rate is $1.50 = £1. If the US dollar depreciates in value against the Euro but the £ sterling-US dollar rate remains stable, then (other things being equal): A. US goods will become cheaper in both the UK and the Eurozone. B. US goods will become cheaper in the Eurozone and more expensive in the UK. C. UK and US goods will both become cheaper in the Eurozone. D. UK goods will become more expensive in the Eurozone but will not change price in the USA. |