If people's incomes decrease, their demand for other currencies shifts to the right.

Question

Quizplus · Accepted Answer

If people's incomes decrease, they may have less money to spend overall, which could potentially decrease their demand for other currencies as well. However, this ultimately depends on a variety of other factors, such as the availability and cost of alternative goods and services. Therefore, we cannot make a general statement that a decrease in income will always lead to a rightward shift in demand for other currencies.

If People's Incomes Decrease, Their Demand for Other Currencies Shifts