Assume that British corporations begin to purchase more supplies from the U.S. as a result of several labor strikes by British suppliers. This action reflects:
A) an increased demand for British pounds.
B) a decrease in the demand for British pounds.
C) an increase in the supply of British pounds for sale.
D) a decrease in the supply of British pounds for sale.

Question

Quizplus · Accepted Answer

When British corporations purchase more supplies from the U.S., they need to exchange British pounds for U.S. dollars, increasing the supply of British pounds in the foreign exchange market.

Assume That British Corporations Begin to Purchase More Supplies from the U.S