Use the graph below to answer questions 9 - 12.
Figure 1.1
-Refer to Figure 1.1.Suppose that the market for British pound is initially in equilibrium at point A with the exchange rate $2.00 per pound.When the demand curve shifts to D₂,the pound ___________ and the quantities of pound traded in the market __________.

Question

Use the graph below to answer questions 9 - 12.
Figure 1.1

-Refer to Figure 1.1.Suppose that the market for British pound is initially in equilibrium at point A with the exchange rate $2.00 per pound.When the demand curve shifts to D₂,the pound ___________ and the quantities of pound traded in the market __________.

Quizplus · Accepted Answer

When the demand curve for the British pound shifts to the right (D₂), it indicates an increase in demand for the pound. This leads to an appreciation of the pound (its value increases) and an increase in the quantities of the pound traded in the market as the new equilibrium point is at a higher exchange rate and a higher quantity than point A.

Use the Graph Below to Answer Questions 9 - 12