The Arrows in Figures A-D Represent Possible Movements of the Exchange

The arrows in Figures A-D represent possible movements of the exchange rate (euros per U.S. dollar) and the quantity of U.S. dollars buyers are willing and able to buy. Use these figures to answer the next two questions:


-The figure below depicts the supply of U.S.dollars in the foreign currency exchange market.

A shift from D₁ to D₃ in the above figure could have been caused by:

A) a decrease in the exchange rate from £1.2/$1 to £1.1/$1.
B) an increase in the exchange rate from £1.1/$1 to £1.2/$1.
C) an increase in demand for U.S.assets relative to British assets.
D) an increase in U.S.interest rates relative to British interest rates.
E) a decrease in British consumers' demand for U.S.goods.