The Following Questions Refer to the graph below.
-Which of the following could cause an increase in the equilibrium exchange rate?

Question

The Following Questions Refer to the graph below. 
-Which of the following could cause an increase in the equilibrium exchange rate?

Quizplus · Accepted Answer

All the options listed (A, B, and C) could cause an increase in the equilibrium exchange rate. An increase in U.S. investment in Britain, an increase in U.S. imports from Britain, and an increase in the number of U.S. tourists traveling to Britain would all increase the demand for British pounds in the foreign exchange market. This increased demand for pounds would lead to an increase in the equilibrium exchange rate of the pound relative to other currencies.

The Following Questions Refer to the Graph Below