Refer to Figure 14.2 for the following questions.
Figure 14.2

-Refer to Figure 14.2. Currency speculators believe that the value of the euro will decrease relative to the dollar. Assuming ceteris paribus, how would this be represented?
A)Supply would decrease, demand would decrease and the economy moves from B to C to D.
B)Supply would increase, demand would decrease and the economy moves from C to B to A.
C)Supply would decrease, demand would increase and the economy moves from A to D to C.
D)Supply would increase, demand would increase and the economy moves from D to A to B.

Question

Refer to Figure 14.2 for the following questions.
Figure 14.2
 
-Refer to Figure 14.2. Currency speculators believe that the value of the euro will decrease relative to the dollar. Assuming ceteris paribus, how would this be represented?
A)Supply would decrease, demand would decrease and the economy moves from B to C to D. 
B)Supply would increase, demand would decrease and the economy moves from C to B to A. 
C)Supply would decrease, demand would increase and the economy moves from A to D to C. 
D)Supply would increase, demand would increase and the economy moves from D to A to B.

Quizplus · Accepted Answer

Supply would decrease, demand would increase and the economy moves from A to D to C.

Refer to Figure 14.2 for the Following Questions