If the British government desires an appreciation in its currency with respect to the U.S. dollar, it would consider intervening in the foreign exchange market by buying dollars with pounds.

Question

Quizplus · Accepted Answer

If the British government wants an appreciation in its currency (pound) with respect to the U.S. dollar, it needs to sell dollars and buy pounds. This will increase the demand for pounds, driving up its value relative to the dollar.

If the British Government Desires an Appreciation in Its Currency