Refer to the information provided in Figure 20.3 below to answer the questions that follow.
Figure 20.3
-Refer to Figure 20.3.Which of the following will shift the supply of pounds from S₀ to S₁?

Question

Refer to the information provided in Figure 20.3 below to answer the questions that follow. Figure 20.3 -Refer to Figure 20.3.Which of the following will shift the supply of pounds from S₀ to S₁?

Quizplus · Accepted Answer

A decrease in British income will shift the supply of pounds to the left, from S₀ to S₁. This is because a decrease in British income will likely result in less British demand for U.S. goods and services, which means there will be less demand for U.S. dollars to buy those goods and services. As a result, there will be a lower supply of pounds in the foreign exchange market. The other choices (A, C, and D) do not directly affect the supply of pounds and would therefore not shift the supply curve.

Refer to the Information Provided in Figure 20