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The Figure Above Shows Supply Curves of Australian Dollars in the Foreign

Question 113

Multiple Choice

   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.
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.

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