Refer to Figure 20.4 for the following questions.
Figure 20.4
-Which of the following would cause the change depicted in Figure 20.4? Note that the figure depicts the quantity of euros traded.
A) Australian productivity falls relative to European productivity.
B) Australians decrease their preferences for goods produced in the European Union (E
U) relative to Australian goods.
C) The EU increases its quotas on Italian wine.
D) The price level of goods produced in the EU decreases relative to the price level of goods produced in Australia.

Question

Refer to Figure 20.4 for the following questions.
Figure 20.4 
-Which of the following would cause the change depicted in Figure 20.4? Note that the figure depicts the quantity of euros traded.
A) Australian productivity falls relative to European productivity. 
B) Australians decrease their preferences for goods produced in the European Union (E
U) relative to Australian goods. 
C) The EU increases its quotas on Italian wine. 
D) The price level of goods produced in the EU decreases relative to the price level of goods produced in Australia.

Quizplus · Accepted Answer

If Australians decrease their preferences for EU goods, the demand for euros would decrease, leading to a change in the quantity of euros traded.

Refer to Figure 20.4 for the Following Questions