If the EU imposes a quota on the importing of clothing produced in China, so reducing UK imports of clothing Which of the following is true regarding the market for foreign currency exchange ?

A. The demand for pounds decreases and the pound depreciates
B. The Supply of pounds increases, and the pound depreciates
C. The Supply of pounds decreases, and the pound appreciates
D. The demand for Pounds increases and the pound appreciates

Correct Answer: The demand for Pounds increases and the pound appreciates ✔

Last Updated: June 11, 2019