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Figure: Change in the Demand for U.S. Dollars
-(Figure: Change in the Demand for U.S. Dollars) Look at the figure Change in the Demand for U.S. Dollars. The change from D₁ to D₂ will occur, all other things being equal, if:

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Use the following to answer questions :
Figure: Change in the Demand for U.S. Dollars

-(Figure: Change in the Demand for U.S. Dollars) Look at the figure Change in the Demand for U.S. Dollars. The change from D₁ to D₂ will occur, all other things being equal, if:

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When interest rates are higher in the United States, it becomes more attractive to hold U.S. dollars, which increases the demand for U.S. dollars, shifting the demand curve to the right from D₁ to D₂. Thus, the change in the demand for U.S. dollars will occur if interest rates are higher in the United States.

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