An increase in the US demand for British pounds causes
A)An appreciation of the pound
B)Depreciation of the dollar
C)None of the above
D)Both a and b

Question

​An increase in the US demand for British pounds causes
A)​An appreciation of the pound
B)Depreciation of the dollar
C)None of the above
D)​Both a and b

Quizplus · Accepted Answer

When there is an increase in US demand for British pounds, there is greater demand for the pound relative to the supply, causing an appreciation in the value of the pound. This means that one pound can purchase more US dollars than before, implying a depreciation of the US dollar. Therefore, both option a and b are correct.

​An Increase in the US Demand for British Pounds Causes

An Increase in the US Demand for British Pounds Causes