The Figure Given Below Illustrates the Market for British Pounds

Multiple Choice

The figure given below illustrates the market for British pounds. D_£ and S_£ are the demand and supply curves of the British pounds respectively. Suppose initially the exchange rate is pegged at $2.50 per pound. If the governments allow the pound to float, the pound will experience a(n) :

A) surplus.
B) buoyant period.
C) appreciation.
D) depreciation.