A decrease in German Treasury interest rates, all else held constant, causes a leftward shift in the __________ euros and causes the dollar to __________ against the euro.
A) supply of; appreciate
B) supply of; depreciate
C) demand for; appreciate
D) demand for; depreciate

Question

Quizplus · Accepted Answer

A decrease in German Treasury interest rates makes euro-denominated assets less attractive, reducing the demand for euros and causing the dollar to appreciate against the euro.

A Decrease in German Treasury Interest Rates, All Else Held