The supply curve of U.S. dollars shifts leftward. This could have been influenced by
A) a rise in the U.S. interest rate differential.
B) a fall in the expected future exchange rate.
C) an increase in the U.S. exchange rate.
D) a decrease in the U.S. exchange rate.

Question

Quizplus · Accepted Answer

A rise in the U.S. interest rate differential makes U.S. assets more attractive, reducing the supply of dollars as investors hold onto them, shifting the supply curve leftward.

The Supply Curve of U