Important factors that change the demand for dollars and shift the demand curve for dollars include which of the following?
I. Interest rates around the world.
II. The current exchange rate.
III. The expected future exchange rate.
A) I, II, and III
B) I and II
C) II
D) I and III

Question

Quizplus · Accepted Answer

Interest rates around the world and the expected future exchange rate are important factors that influence the demand for dollars, as they affect the attractiveness of holding dollar-denominated assets. The current exchange rate does not shift the demand curve but rather causes movement along the curve.

Important Factors That Change the Demand for Dollars and Shift