If the U.S. dollar appreciates relative to the British pound, then
A) the pound will appreciate relative to the U.S. dollar.
B) the pound will depreciate relative to the U.S. dollar.
C) British goods will be more expensive for Americans.
D) American goods will be less expensive for the British.

Question

Quizplus · Accepted Answer

If the U.S. dollar appreciates relative to the British pound, it means that it can buy more pounds. This leads to a decrease in demand for pounds and an increase in demand for dollars, causing the pound to depreciate relative to the U.S. dollar. Additionally, British goods will become cheaper for Americans, and American goods will become more expensive for the British due to the exchange rate.

If the US Dollar Appreciates Relative to the British Pound, Then