-In the figure above, an increase in the U.S. interest rate relative to that in Canada shifts the demand curve for U.S. dollars ________ and shifts the supply curve of U.S. dollars ________.
A) leftward; leftward
B) leftward; rightward
C) rightward; leftward
D) rightward; rightward

Question

-In the figure above, an increase in the U.S. interest rate relative to that in Canada shifts the demand curve for U.S. dollars ________ and shifts the supply curve of U.S. dollars ________.
A) leftward; leftward 
B) leftward; rightward 
C) rightward; leftward 
D) rightward; rightward

Quizplus · Accepted Answer

An increase in the U.S. interest rate relative to that in Canada makes holding U.S. dollars more attractive, increasing the demand for U.S. dollars (shifting the demand curve rightward) and decreasing the supply of U.S. dollars as fewer people want to exchange them for Canadian dollars (shifting the supply curve leftward).

-In the Figure Above, an Increase in the U