Refer to Figure 20.1 for the following questions.
Figure 20.1
-Refer to Figure 20.1.Which of the following events 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 Australia
C) Real income rises in Australia
D) Real income falls in England

Question

Refer to Figure 20.1 for the following questions.
Figure 20.1 
-Refer to Figure 20.1.Which of the following events 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 Australia 
C) Real income rises in Australia 
D) Real income falls in England

Quizplus · Accepted Answer

An increase in interest rates in England would make British assets more attractive, increasing demand for pounds and decreasing supply of dollars, causing the shifts in the supply and demand curves.

Refer to Figure 20.1 for the Following Questions