Consider two countries, the United States and the United Kingdom, that trade with each other. Suppose that U.S. consumer preferences for goods made in the United Kingdom fall, while they remain the same for domestic goods. The following graph shows the supply and demand for the U.K. pound in the United States before the change in preferences. The vertical axis is the exchange rate of the pound in terms of the dollar, and the horizontal axis is the quantity of pounds.

Show how the change in consumer preferences affects the equilibrium exchange rate by shifting one or both of the curves on the graph. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. O Supply Demand Supply EXCHANGE RATE (Dollars per pound) Demand QUANTITY (Millions of pounds) As a result of the change in preferences, the U.S. dollar