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

question 355

Multiple Choice

-In the figure above, the shift in the demand curve for U.S. dollars from D₀ to D₁ could occur when

• A) the expected future exchange rate decreases.
• B) the U.S. interest rate rises.
• C) people expect that the dollar will depreciate.
• D) foreign interest rates increase.

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Definitions:

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be consumed by many people without depleting and without preventing others from consuming it.

Nonrival

A good or service is nonrival if its consumption by one individual does not reduce its availability to others.

Nonexcludable

A characteristic of public goods: Once a good is produced, no one can be excluded from enjoying its benefits.

Marginal Social Benefit

The additional gain to society as a whole from consuming or producing one more unit of a good or service.