Professional Documents
Culture Documents
For each of the following scenarios, sketch a diagram with a simple explanation to
show what will happen to supply, demand and the equilibrium price of the Pound,
when:
Note: assume in each case that the Dollar/Sterling exchange rate is at issue, unless the question
indicates otherwise.
1) A series of terrorist attacks takes place in London, particularly targeting tourist areas.
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2) There are further improvements in the quality and technology of consumer electronic devices
produced by Japanese firms.
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3) OPTIONAL: There are financial crises in Russia and Asia, while the UK remains stable and
fully in control of inflation.
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4) The Royal Family responds to popular demand by opening all of their palaces to tourists.
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