Between June and the end of July 2016 the UK pound sterling depreciated by 11% against a basket of currencies of the UK’s major trading partners.
The diagram shows the original aggregate demand curve $A{D_1}$ and the original aggregate supply curve $A{S_1}$ for the UK economy before June 2016. The equilibrium is at X.
What will be the new equilibrium for the UK economy as a result of the depreciation of the pound
sterling?
A
2 )
B
3 )
C
4 )
D
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