Refer to the information provided in Figure 34.4 below to answer the question(s) that follow.


Refer to Figure 34.4. The demand and supply of pounds are
D
2 and
S
2. If the demand shifts to
D
1 and supply remains unchanged at
S
2
◦ the dollar depreciates and the equilibrium quantity of pounds increases.
◦ the dollar depreciates and the equilibrium quantity of pounds decreases.
◦ the dollar appreciates and the equilibrium quantity of pounds decreases.
◦ the dollar appreciates and the equilibrium quantity of pounds increases.