Question

Any event that increases the supply of British pounds to be exchanged for U.S. dollars should result in a(n) ____ in the value of the British pound with respect to ____, other things being equal. a. decrease; nondollar currencies b. increase; U.S. dollar c. decrease; U.S. dollar d. increase; nondollar currencies

Answer 1

Option (C) is correct.

Step-by-step explanation:

If there is an increase in the supply of British pounds then as a result the demand for British pounds decreases as there are enough supply of British pounds available in the market. So, if any investor wants to exchange US dollars for British pounds then they need to pay more for each dollar obtained as the supply of the British pounds is large.

This will reduce the value of British pounds with respect to the value of United States dollar.