Refer to the information provided in Figure 20.4 below to answer the questions that follow.
Figure 20.4
-Refer to Figure 20.4.The demand and supply of pounds are D2 and S2.An increase in British demand for U.S.exports,ceteris paribus,could
A) increase the exchange rate ($/pound) to $2.50.
B) decrease the exchange rate ($/pound) to $1.50.
C) decrease the equilibrium quantity from 400 to 300 pounds.
D) increase the demand for pounds from D2 to D1.
Correct Answer:
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