The figure above shows supply curves of Australian dollars in the foreign exchange market.
-Refer to the figure above.The supply curve shifts rightward from S₀ to S₂ when the Australian interest rate ________ and foreign interest rates are unchanged.The supply curve shifts rightward from S₀ to S₂ when the expected future exchange rate ________.
A) rises;falls
B) falls;falls
C) rises;rises
D) falls;rises
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.
Correct Answer:
Verified
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