Using an AD/AS diagram, outline the potential impacts of a weakening pound on the UK economy as a whole refer to the passage below.
Rising costs one month after the 2016 referendum, the boss of easyJet, Carolyn McCall, told the BBC that its cots had increased by £40m because of the fall in the pound, a consequence of Britain’s vote to leave the EU. Easyjet pays for the fuel in US dollars: the 10% fall in the exchange rate raised costs. The devaluation of the pound since the Brexit vote has also had an impact n’consumer confidence’, or wether people feel compelled to book flights and holidays, she continued. Bookings were down, but she went on to say “it is worth pointing out that although every airline is having a tough time, it is very good news for passengers. it actually means it’s cheaper to fly and ticket prices are low.
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