Answer :
The rise in the sterling-dollar exchange rate will have different effects on various economic indicators.
(1) The volume of UK exports: A rise in the exchange rate of sterling dollar will make exports of UK goods and services expensive for foreign customers, so the volume of UK exports is likely to decrease.
(2) The value of UK exports: An increase in the exchange rate of sterling-dollar is expected to make UK exports more expensive for foreign customers, so the value of UK exports is likely to fall.
(3) The price of UK imports: A rise in the exchange rate of sterling-dollar is expected to make imports of foreign goods and services less expensive for UK buyers, so the price of UK imports is likely to fall.
(4) The volume of UK imports: The increase in the exchange rate of sterling-dollar is expected to make imports of foreign goods and services less expensive for UK buyers, so the volume of UK imports is likely to increase.
(5) The value of UK imports: A rise in the exchange rate of sterling-dollar is expected to make imports of foreign goods and services less expensive for UK buyers, so the value of UK imports is likely to increase.
(6) The general level of prices in the UK: An increase in the exchange rate of sterling-dollar is expected to make imports of foreign goods and services cheaper, so the prices of goods and services in the UK are likely to decrease.
(7) The UK balance of trade: A rise in the exchange rate of sterling-dollar is expected to decrease exports and increase imports, so the balance of trade of UK will likely deteriorate.
(8) The UK capital account: An increase in the exchange rate of sterling-dollar is likely to attract more foreign investment, so the capital account of UK will likely improve.
1. The volume of UK exports is expected to decrease due to the rise in the exchange rate of sterling-dollar because exports of UK goods and services will be expensive for foreign customers.
2. The value of UK exports is expected to fall due to the increase in the exchange rate of sterling-dollar because UK exports will be more expensive for foreign customers.
3. The price of UK imports is expected to fall due to the rise in the exchange rate of sterling-dollar because imports of foreign goods and services will be less expensive for UK buyers.
4. The volume of UK imports is expected to increase due to the rise in the exchange rate of sterling-dollar because imports of foreign goods and services will be less expensive for UK buyers.
5. The value of UK imports is expected to increase due to the rise in the exchange rate of sterling-dollar because imports of foreign goods and services will be less expensive for UK buyers.
6. The general level of prices in the UK is expected to decrease due to the increase in the exchange rate of sterling-dollar because imports of foreign goods and services will become cheaper.
7. The UK balance of trade is expected to deteriorate due to the rise in the exchange rate of sterling-dollar because exports will decrease and imports will increase.
8. The UK capital account is expected to improve due to the rise in the exchange rate of sterling-dollar because it will attract more foreign investment.
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