We would expect the euro to appreciate when there is a __________ shift in the euro demand curve or a __________ shift in the euro supply curve.
A) rightward; rightward
B) rightward; leftward
C) leftward; rightward
D) leftward; leftward

Question

Quizplus · Accepted Answer

When there is a rightward shift in the euro demand curve, this means that demand for euros has increased, which would increase the value of the euro. When there is a leftward shift in the euro supply curve, this means that there are fewer euros available, which would also increase the value of the euro. Therefore, a rightward shift in the euro demand curve or a leftward shift in the euro supply curve would both lead to an appreciation of the euro.

We Would Expect the Euro to Appreciate When There Is