The supply curve of British pounds slopes upward because as the dollar _____ American goods become ______ for the British.Therefore, the British purchase ______ American goods, and the quantity of pounds supplied increases.
A) depreciates against the pound; less expensive; more
B) depreciates against the pound; more expensive; less
C) appreciates against the pound; more expensive; more
D) appreciates against the pound; less expensive; less

Question

Quizplus · Accepted Answer

When the dollar depreciates against the pound, American goods become less expensive for the British, causing them to purchase more American goods. This increase in demand for American goods leads to an increase in the quantity of pounds supplied, which causes the supply curve of British pounds to slope upward.

The Supply Curve of British Pounds Slopes Upward Because as the Dollar