In a graph showing the market supply and demand for British pounds in terms of U.S. dollars, the supply-of-pounds curve is upsloping because
A) fewer British pounds can be purchased per dollar if U.S. dollars become more expensive.
B) fewer U.S. dollars can be purchased per pound if the British pounds become less expensive.
C) the British will purchase more U.S. goods or services when the dollar price of pounds rises.
D) the British will purchase more U.S. goods or services when the dollar price of pounds falls.

Question

Quizplus · Accepted Answer

The supply-of-pounds curve is upsloping because as the value of the pound increases in terms of dollars (i.e., it takes more dollars to buy pounds), British consumers find U.S. goods cheaper in comparison to British goods, leading them to purchase more U.S. goods or services. This increases the supply of pounds in the foreign exchange market as British consumers exchange pounds for dollars to make purchases.

In a Graph Showing the Market Supply and Demand for British