The demand curve for dollars shifts rightward if
A)the Canadian exchange rate falls.
B)the expected future value of the dollar falls.
C)the Canadian interest rate differential rises.
D)the Canadian interest rate differential falls.
E)the price of Canadian goods and services increases.

Question

Quizplus · Accepted Answer

When the Canadian interest rate differential rises, it makes Canadian assets more attractive, increasing the demand for Canadian dollars, which shifts the demand curve for dollars rightward.

The Demand Curve for Dollars Shifts Rightward If