Refer to the Information Provided in Figure 20

question 128

Multiple Choice

Refer to the information provided in Figure 20.4 below to answer the questions that follow. Figure 20.4
-Refer to Figure 20.4.The demand and supply of pounds are D1 and S1.If the supply shifts to S2 and demand remains unchanged at D1

• A)the dollar depreciates and the equilibrium quantity of pounds increases.
• B)the dollar depreciates and the equilibrium quantity of pounds decreases.
• C)the dollar appreciates and the equilibrium quantity of pounds decreases.
• D)the dollar appreciates and the equilibrium quantity of pounds increases.

---

Definitions:

Credit Markets

Financial markets where borrowers can obtain funds from lenders, often facilitated by financial intermediaries, allowing for the purchase of goods, services, or investment in enterprises.

Capital Goods

Long-lasting goods acquired or manufactured by a business that are used to produce other goods or services.

Interest Rates

The percentage charged on borrowed funds or paid on deposits over time, reflecting the cost of borrowing or the reward for saving.

Loanable Funds

The money available for borrowing and lending in the financial markets, determined by savings and investments.