Final answer:
A higher dollar price for pounds caused by a shift in demand or supply means that the dollar has appreciated while the pound has depreciated.
Step-by-step explanation:
When the dollar price for pounds increases due to a shift in either demand or supply, it means that the dollar has appreciated while the pound has depreciated. In other words, it takes more dollars to buy the same amount of pounds, indicating a decrease in the value of the pound relative to the dollar.
For example, let's say the initial exchange rate is $1.50 per pound. If the dollar price for pounds increases to $2 per pound, it means that the dollar has appreciated and the pound has depreciated. In this scenario, the answer would be option c. The dollar has appreciated and the pound has depreciated.