If British Real GDP Rose Relative to U

question 86

Multiple Choice

If British real GDP rose relative to U.S.real GDP,there would be

• A) a rightward movement along the supply of British pounds curve in the dollar-pound market
• B) a leftward movement along the supply of British pounds curve in the dollar-pound market
• C) a rightward shift of the supply of British pounds curve in the dollar-pound market
• D) a leftward shift of the supply of British pounds curve in the dollar-pound market
• E) the tendency for the supply of British pounds curve to become flatter in the dollar-pound market

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Definitions:

Reserves

Reserves are funds or materials set aside or saved for future use or to cover unexpected emergencies, often used in financial, resource, or energy sectors.

Equilibrium Exchange Rate

The exchange rate at which the demand for a currency is exactly equal to its supply in the foreign exchange market.

Purchasing Power Parity Theory

An economic theory that compares different countries' currencies through a "basket of goods" approach to determine relative currency values.

Exchange Rates

The value of one currency expressed in terms of another currency, used in international trade and investment.