In June 2008, $1 bought 0.5 pounds and in October, $1 bought 0.65 pounds. As a result of this change, ________ between June and October.

Question

Quizplus · Accepted Answer

The increase in the value of the pound (from 0.5 pounds per dollar to 0.65 pounds per dollar) means that the dollar appreciated. When a currency appreciates, its purchasing power increases, meaning that fewer units of the currency are needed to purchase goods and services. Therefore, the quantity of dollars demanded decreases.

In June 2008, $1 Bought 0