Assuming market-determined exchange rates, use supply and demand schedules for pounds to analyze the effect on the exchange rate (dollars per pound) between the U.S. dollar and the UK pound under each of the following circumstances:

a. Voter polls suggest that the UK’s conservative government will be replaced by radicals who pledge to nationalize all foreign-owned assets.

b. Both the UK and U.S. economies slide into recession, but the UK recession is less severe than the U.S. recession.

c. The Federal Reserve adopts a tight monetary policy that dramatically increases U.S. interest rates.

d. Britain’s oil production in the North Sea decreases, and exports to the United States fall.

e. The United States unilaterally reduces tariffs on UK products.

f. Britain encounters severe inflation, while price stability exists in the United States.

g. Fears of terrorism reduce U.S. tourism in the United Kingdom.

h. The British government invites U.S. firms to invest in British oil fields.

i. The rate of productivity growth in Britain decreases sharply.

j. An economic boom occurs in the United Kingdom, which induces the UK consumers to purchase more U.S.-made autos, trucks, and computers.

k. Ten-percent inflation occurs in both the United Kingdom and the United States.