In the table above, a change in the ______ will result in a movement along the supply schedule of pounds.
A) dollar/pound exchange rate
B) rate of interest in the United States
C) per-capita income of Americans
D) level of technology in the United States

Question

Quizplus · Accepted Answer

A change in the dollar/pound exchange rate would affect the supply of pounds as it would affect the willingness of investors and businesses in the United States to hold pounds. A higher exchange rate would make pounds more expensive, reducing demand and increasing supply, causing a movement along the supply schedule. Changes in the other variables listed would likely affect the demand for euros, but not the supply of pounds.

In the Table Above, a Change in the ______ Will