When in 1985 a British Pound Cost Approximately $1

When in 1985 a British pound cost approximately $1.30,a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker dollar,the same Shetland sweater would have cost

A) less than $130.
B) more than $130.
C) $130,since the exchange rate does not affect the prices that American consumers pay for foreign goods.
D) $130,since the demand for Shetland sweaters will decrease to prevent an increase in price due to the stronger dollar.

Correct Answer:

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