Consider the currency market for British pounds and U.S. dollars. A decrease in the supply of British pounds results in

A) an appreciation of the pound and a depreciation of the dollar.
B) a depreciation of the pound and a depreciation of the dollar.
C) an appreciation of the pound and an appreciation of the dollar.
D) a depreciation of the pound and an appreciation of the dollar.

Supply of British Pounds

The total amount of British currency that is available for transactions or investment at any given time.

Currency Market

The currency market, also known as the foreign exchange market, is a global decentralized market for the trading of currencies.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear, tear, or obsolescence.