If people in Britain increase their demand for French francs to buy more French textiles, assuming all other factors remain constant, what will happen to the pound's exchange rate against the French franc?

Macroeconomic Issues and Analysis MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
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Published
31 May 2019
Last updated
28 May 2026

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Explanation

When British residents seek more French francs to purchase French goods, the demand for francs rises relative to pounds. This increased demand causes the pound to depreciate against the franc, leading to a fall in the pound's value compared to the franc.

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