-In the figure above, the shift in the demand curve for Australian dollars from D₀to D₁could occur when A)the Australian interest rate rises. B)the expected future exchange rate decreases. C)foreign interest rates increase. D)people expect that the dollar will depreciate.

Question

Quizplus · Accepted Answer

An increase in the Australian interest rate makes Australian assets more attractive, increasing the demand for Australian dollars and shifting the demand curve to the right from D0 to D1.

-In the Figure Above, the Shift in the Demand Curve