The Figure Given Below Depicts the Foreign Exchange Market for British

question 64

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-If prices rise within a country, then, other things equal, the value of a unit of domestic currency will:

• A)rise in both the domestic and the foreign exchange markets.
• B)fall in both the domestic and the foreign exchange markets.
• C)rise in the domestic market and fall in the foreign exchange market.
• D)fall in the domestic market and rise in the foreign exchange market.
• E)fluctuate unpredictably in both domestic and foreign exchange markets.

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