
The figure above shows the demand curve for dollars in the foreign exchange market.
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Which of the following factors could lead to an upward movement along the demand curve as indicated by the arrow?
I. An increase in the U.S. interest rate
ii. A decrease in the U.S. interest rate
Iii. An increase in the expected future U.S. exchange rate.
A) ii only
B) i and iii
C) i only
D) ii and iii
E) None of the factors could lead to the upward movement illustrated by the arrow.
Correct Answer:
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