Test #2 preparation. Third entry.

One of your classmates asked:

"Hi Dr. Jack,

I would like to ask you about question #4 (B) in the homework. If the recession in Britain is less severe than the recession in U.S. then the Bristish are more able to buy from U.S. than the Americans from Britain. So, the supply of the pounds increase and the demand of pounds decrease, which will lead to the appreciation of the $. I was wondering if this is correct."

My response:

Yes, I believe you are correct. The answer to 4-B is opposite. My bad for copying the answer straight out of the instructor's manual.

Check out the Secret of George Mason.