If the U.S. government increased its holdings of British pounds, definitely

Name: If the U.S. government increased its holdings of British pounds, definitely
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Question

Quizplus · Accepted Answer

When the U.S. government increases its holdings of British pounds, it means that they are buying more pounds with their U.S. dollars. This leads to an increase in U.S. official reserves, which is a component of the capital account. Therefore, the correct answer is C - there would be an increase in U.S. official reserves.

If the US Government Increased Its Holdings of British Pounds, Definitely