Asked by Pratik Sanyal on Jul 30, 2024
Verified
The U.S. demand for British pounds is
A) downsloping because a higher dollar price of pounds means British goods are cheaper to Americans.
B) downsloping because a lower dollar price of pounds means British goods are more expensive to Americans.
C) upsloping because a lower dollar price of pounds means British goods are cheaper to Americans.
D) downsloping because a lower dollar price of pounds means British goods are cheaper to Americans.
Demand
The quantity of a good or service that consumers are willing and able to purchase at different prices.
British Pounds
The currency of the United Kingdom, symbolized as GBP, and commonly referred to as the pound sterling.
- Understand the supply and demand dynamics in the foreign exchange market.
Verified Answer
MF
Marcelle FernandezJul 30, 2024
Final Answer :
D
Explanation :
The demand curve for a currency, like the British pound, is typically downsloping because as the currency becomes cheaper in terms of dollars (a lower dollar price of pounds), British goods become more affordable to Americans, increasing the demand for pounds to purchase these goods.
Learning Objectives
- Understand the supply and demand dynamics in the foreign exchange market.