Use the following graph, which shows the supply and demand for British pounds, to answer the next question.
D1 and S1 represent the initial demand and supply curves. If there is a large increase in the number of American tourists visiting Britain because of a major event (like the Olympics or the World Cup), what should the British government do if it wants to fix the exchange rate at its initial level?
A. Shift D1 to D3
B. Shift S1 to S2
C. Shift S1 to S3
D. Shift D1 to D2
Answer: C
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