Figure 18-2
-Refer to Figure 18-2.Which of the events below cause the shifts in the supply and demand curves in the market for dollars against the British pound shown in the graph above?
A)Interest rates rise in England.
B)Interest rates rise in the United States.
C)Real income rises in the United States.
D)Real income falls in England.

Question

Figure 18-2 
-Refer to Figure 18-2.Which of the events below cause the shifts in the supply and demand curves in the market for dollars against the British pound shown in the graph above?
A)Interest rates rise in England. 
B)Interest rates rise in the United States. 
C)Real income rises in the United States. 
D)Real income falls in England.

Quizplus · Accepted Answer

When interest rates rise in England, it makes British investments more attractive, increasing demand for pounds and decreasing supply of dollars, causing the shifts shown in the graph.

Figure 18-2 -Refer to Figure 18-2.Which of the Events Below Cause the Below