The supply curve of U.S. dollars shifts leftward. This could have been influenced by .
A) a rise in the U.S. interest rate differential
B) a fall in the expected future exchange rate
C) a decrease in the U.S. exchange rate
D) an increase in the U.S. exchange rate

Question

Quizplus · Accepted Answer

A rise in the U.S. interest rate differential would make U.S. dollars more attractive to foreign investors, increasing demand for U.S. dollars and causing the supply curve to shift leftward. Choices B, C, and D would all result in an increase in the supply of U.S. dollars, so they are incorrect.

The Supply Curve of U