Which of the following occurrences would NOT shift the demand curve for U.S. dollars in the foreign exchange market?
A) an increase in the U.S. exchange rate
B) an increase in U.S. interest rates
C) an increase in the expected future U.S. exchange rate
D) an increase in foreign interest rates

Question

Quizplus · Accepted Answer

An increase in the U.S. exchange rate would not shift the demand curve for U.S. dollars because it is already represented on the exchange rate axis. A shift in the demand curve would be caused by factors such as changes in interest rates, changes in expectations for future exchange rates, or other economic factors such as changes in GDP or inflation rates.

Which of the Following Occurrences Would NOT Shift the Demand