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The Figure Above Shows Demand Curves for Australian Dollars in the Foreign

Question 96

Multiple Choice

   The figure above shows demand curves for Australian dollars in the foreign exchange market. -Refer to the figure above.The demand curve shifts rightward from D₀ to D₁ when the Australian interest rate ________ and foreign interest rates are unchanged.The demand curve shifts rightward from D₀ to D₁ when the expected future exchange rate ________. A) rises;falls B) rises;rises C) falls;rises D) falls;falls E) None of the above answers is correct because the factors mentioned lead to movements along the demand curve and not to shifts of the demand curve.
The figure above shows demand curves for Australian dollars in the foreign exchange market.
-Refer to the figure above.The demand curve shifts rightward from D₀ to D₁ when the Australian interest rate ________ and foreign interest rates are unchanged.The demand curve shifts rightward from D₀ to D₁ when the expected future exchange rate ________.


A) rises;falls
B) rises;rises
C) falls;rises
D) falls;falls
E) None of the above answers is correct because the factors mentioned lead to movements along the demand curve and not to shifts of the demand curve.

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