Suppose Sue Flay, a U.S. investor, purchases British pounds worth $1.5 million in the foreign exchange market.

Question:

Suppose Sue Flay, a U.S. investor, purchases British pounds worth $1.5 million in the foreign exchange market. What effect does this transaction have on the U.S. and British monetary bases and M2 money supplies? Assume the spot is $1.50/£, the pound floats against the dollar, and the transaction is sufficiently small so that the does not change.
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...