The Figure Above Shows Demand Curves for Australian Dollars in the Foreign

question 7

Multiple Choice

The figure above shows demand curves for Australian dollars in the foreign exchange market.
-Based on the figure above, which of the following factors could lead the demand curve to shift leftward from D0 to D₂?

• A) A rise in the expected future Australian exchange rate.
• B) A fall in foreign interest rates.
• C) A rise in the Australian exchange rate.
• D) A rise in the Australian interest rate.
• E) A fall in the Australian exchange rate.

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Definitions:

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