-In the figure above, the shift in the demand curve for Australian dollars from D₀to D₁could occur when A)foreign interest rates drop. B)the expected future exchange rate falls. C)people expect that the dollar will depreciate. D)the Australian interest rate drops.

Question

Quizplus · Accepted Answer

A drop in foreign interest rates makes Australian assets more attractive, increasing demand for Australian dollars and shifting the demand curve to the right from D0 to D1.

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