An increase in the dollar price of British pounds will:
A)increase the pound price of dollars.
B)lower the pound price of dollars.
C)leave the pound price of dollars unchanged.
D)cause Britain's terms of trade with the United States to deteriorate.

Question

Quizplus · Accepted Answer

An increase in the dollar price of British pounds means that it takes more dollars to buy a pound, which implies that the pound has appreciated relative to the dollar. Consequently, the pound price of dollars will decrease, as fewer pounds are needed to buy a dollar.

An Increase in the Dollar Price of British Pounds Will