-In the figure above, the shift in the demand curve for U.S. dollars from D? to D? could occur when
A) the expected future exchange rate falls.
B) the U.S. interest rate decreases.
C) people expect that the dollar will appreciate.
D) foreign interest rates increase.

Question

-In the figure above, the shift in the demand curve for U.S. dollars from D? to D? could occur when
A) the expected future exchange rate falls. 
B) the U.S. interest rate decreases. 
C) people expect that the dollar will appreciate. 
D) foreign interest rates increase.

Quizplus · Accepted Answer

When people expect that the dollar will appreciate, the demand for U.S. dollars increases as investors and traders anticipate higher returns, causing the demand curve to shift to the right.

-In the Figure Above, the Shift in the Demand Curve