Exhibit 15-7 Foreign Exchange Market for U

Exhibit 15-7 Foreign exchange market for U.S. dollars and British pounds

Which of the following could cause the dollar-pound exchange rates to change as shown in Exhibit 15-7?

A) American goods become more popular in Great Britain.
B) British incomes rise, while U.S. incomes remain unchanged.
C) The U.S. price level rises, while the British price level remains unchanged.
D) The U.S. real interest rate rises, while the British real interest rate remains unchanged.