-In the figure above, an increase in the U.S. interest rate relative to that in Canada shifts the demand curve for U.S. dollars _ and shifts the supply curve of U.S. dollars _ .

Question

Quizplus · Accepted Answer

An increase in the U.S. interest rate makes U.S. assets more attractive, increasing demand for U.S. dollars (rightward shift) and decreasing the supply of U.S. dollars as fewer people want to hold foreign currencies (leftward shift).

-In the Figure Above, an Increase in the U