Any event that increases the supply of British pounds to be exchanged for U.S. dollars should result in a(n) ____ in the value of the British pound with respect to ____, other things being equal.
A) increase; the U.S. dollar
B) increase; nondollar currencies
C) decrease; nondollar currencies
D) decrease; the U.S. dollar

Question

Any event that increases the supply of British pounds to be exchanged for U.S. dollars should result in a(n) ____ in the value of the British pound with respect to ____, other things being equal.​
A) ​increase; the U.S. dollar
B) ​increase; nondollar currencies
C) ​decrease; nondollar currencies
D) ​decrease; the U.S. dollar

Quizplus · Accepted Answer

According to the law of supply and demand, an increase in the supply of British pounds will lead to a decrease in its value with respect to the U.S. dollar, assuming all else remains equal. This is because there will be more British pounds available in the market which will reduce its purchasing power and make it less valuable compared to the U.S. dollar. Therefore, the correct answer is choice D.

Any Event That Increases the Supply of British Pounds to Be