The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.
Figure 21.2

-Refer to Figure 21.2. An increase in the equilibrium quantity of British pounds from 300 to 350 would most likely mean that:
A) the demand for British pounds has decreased.
B) the supply of British pounds has decreased.
C) increased demand for dollars has caused the dollar to depreciate and the pound to appreciate.
D) increased demand for dollars has caused the dollar to appreciate and the pound to depreciate.
E) the equilibrium exchange rate is $1.60 per British pound.

Question

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.
Figure 21.2
 
-Refer to Figure 21.2. An increase in the equilibrium quantity of British pounds from 300 to 350 would most likely mean that:
A) the demand for British pounds has decreased. 
B) the supply of British pounds has decreased. 
C) increased demand for dollars has caused the dollar to depreciate and the pound to appreciate. 
D) increased demand for dollars has caused the dollar to appreciate and the pound to depreciate. 
E) the equilibrium exchange rate is $1.60 per British pound.

Quizplus · Accepted Answer

The Answer of The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.
Figure 21.2
 
-Refer to Figure 21.2. An increase in the equilibrium quantity of British pounds from 300 to 350 would most likely mean that:
A) the demand for British pounds has decreased. 
B) the supply of British pounds has decreased. 
C) increased demand for dollars has caused the dollar to depreciate and the pound to appreciate. 
D) increased demand for dollars has caused the dollar to appreciate and the pound to depreciate. 
E) the equilibrium exchange rate is $1.60 per British pound.

The Figure Given Below Depicts the Foreign Exchange Market for British