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Assume that the income levels in U.K. start to rise, while U.S. income levels remain unchanged. This will place ________ pressure on the value of British pound. Also, assume that U.S. interest rates rise, while the British pound remains unchanged. This will place ________ pressure on the value of British pound.a. downward; downwardb. upward; downwardc. upward; upwardd. downward; upward

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Answer:D.

downward; upward

Explanation: An increase in income level is one of the major causes of inflation in an economy,once the income level of consumers continue to rise the amount of money spent on goods and services will increase,they will be ready to spend even at high costs which will cause a inflation. This inflation will cause the UK currency to drop,or reduce in value when compared to an unchanged income level in The U.S.

While if the British pound become unchanged as interest rate increases in the U.S their will be an upward pressure on the British Pounds.

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