Figure 15-2
-Refer to Figure 15-2. Suppose the exchange rate between the dollar and the British pound Jis fixed at £0.3 per dollar. Now suppose U.S. residents choose to purchase more British goods and services. What happens in the foreign exchange market?

Question

Figure 15-2 
-Refer to Figure 15-2. Suppose the exchange rate between the dollar and the British pound Jis fixed at £0.3 per dollar. Now suppose U.S. residents choose to purchase more British goods and services. What happens in the foreign exchange market?

Quizplus · Accepted Answer

When U.S. residents purchase more British goods, they need more pounds, increasing the supply of dollars in the foreign exchange market, which causes the exchange rate for the dollar to fall.

Figure 15-2 -Refer to Figure 15-2. Suppose the Exchange Rate Between the Rate