Other things remaining the same, if the expected future exchange rate rises, the demand curve for Australian dollars shifts ________ and the supply curve of Australian dollars shifts ________.
A)rightward; rightward
B)leftward; leftward
C)leftward; rightward
D)rightward; leftward

Question

Quizplus · Accepted Answer

If the expected future exchange rate rises, people expect the Australian dollar to be stronger in the future, increasing demand for it now (rightward shift in demand) and decreasing the willingness to supply it now (leftward shift in supply).

Other Things Remaining the Same, If the Expected Future Exchange