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Assume U.S. interest rates fall relative to British interest rates. Other things being equal, how should this affect (a) the U.S. demand for British pounds,
Assume U.S. interest rates fall relative to British interest rates. Other things being equal, how should this affect (a) the U.S. demand for British pounds, (b) the supply of pounds for sale, and (c) the equilibrium value of the pound?
- Demand for pounds should increase, supply of pounds for sale should increase, and the pounds value should increase.
- Demand for pounds should increase, supply of pounds for sale should decrease, and the pounds value should increase.
- Demand for pounds should decrease, supply of pounds for sale should decrease, and the pounds value should increase.
- Demand for pounds should decrease, supply of pounds for sale should decrease, and the pounds value should decrease.
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