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    Well can you basically answer this with a yes or no so i don't get confused

    If the pound is real low is this strong?

    thanks
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    It depends.

    If pound loses value (depreciation):
    - price of exports decreases, so demand for exports increases
    - price of imports increases, so demand for imports decreases
    - Deficit reduces

    If pound gains value (appreciation):

    - price of exports increases, so demand for exports decreases
    - price of imports decreases, so demand for imports decreases
    - Deficit increases

    This is known as the exchange rate transmission mechanism, hopefully it cleared things up a bit!
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    (Original post by DJon)
    It depends.

    If pound loses value (depreciation):
    - price of exports decreases, so demand for exports increases
    - price of imports increases, so demand for imports decreases
    - Deficit reduces

    If pound gains value (appreciation):

    - price of exports increases, so demand for exports decreases
    - price of imports decreases, so demand for imports decreases
    - Deficit increases

    This is known as the exchange rate transmission mechanism, hopefully it cleared things up a bit!

    So, if a pound gains value, demand for exports/imports decrease, who does the demanding, those within UK or abroad?
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    If the pound gains value, the demand for British exports decreases (outside the UK) because it means 1 euro or dollar now buys less pounds, making British made goods appear more expensive.

    On the other hand, the pound can now buy more euros or dollars, so goods in foreign countries appear cheaper, raising demands for imports - and it's vice versa for a depreciation of the pound.
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    (Original post by mistel)
    So, if a pound gains value, demand for exports/imports decrease, who does the demanding, those within UK or abroad?
    UK residents do the demanding for imports and people abroad do the demanding for UK exports.
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    The fake pound is usually lighter hence weaker.....
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    A strong pound refers to the pound being worth more than other currencies. It leads to increased imports as foreign goods are cheaper for UK consumers and it leads to decreased exports as prices of UK goods would be more expensive to consumers living abroad.

    A weak pound is the opposite. Worth less than other currencies = decreased imports and increased exports.
 
 
 
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