Use the Figure Below to Answer the Following Question(s)

question 76

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 18-2
-Figure 18-2 illustrates supply and demand for U.S. dollars and British pounds in the foreign exchange market. Which of the following would cause the demand for foreign exchange (pounds) to shift from D₁ to D₂?

• A)an increase in the real interest rate in Britain relative to the United States
• B)higher inflation in Britain than in the United States
• C)higher income growth in Britain than in the United States
• D)an increase in the number of British citizens vacationing in the United States

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