The Figure Given Below Depicts the Foreign Exchange Market for British

question 75

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.?Figure 21.2

-Refer to Figure 21.2. Suppose S₁ is the initial supply curve and the British demand for U.S. manufactured computers decreases. Then, with flexible exchange rates:

• A) the price per British pound decreases by $0.10 and the quantity of British pounds increases by 50.
• B) the price per British pound decreases by $0.10 and the quantity of British pounds decreases by 50.
• C) the price per British pound increases by $0.15 and the quantity of British pounds decreases by 50.
• D) the price per British pound increases by $0.15 and the quantity of British pounds decreases by 75.
• E) the price per British pound and the quantity of British pounds remain unchanged.