We would expect the euro to depreciate 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

A depreciation of the euro would occur if there is a decrease in demand for euros (a leftward shift in the demand curve) or an increase in the supply of euros (a rightward shift in the supply curve). This is because a decrease in demand or an increase in supply, all else being equal, would lower the price of the euro relative to other currencies.

We Would Expect the Euro to Depreciate When There Is