Refer to Figure 14.2 for the Following Questions

question 135

Multiple Choice

Refer to Figure 14.2 for the following questions.
Figure 14.2

-Refer to Figure 14.2. Currency speculators believe that the value of the euro will decrease relative to the dollar. Assuming ceteris paribus, how would this be represented?

• A)Supply would decrease, demand would decrease and the economy moves from B to C to D.
• B)Supply would increase, demand would decrease and the economy moves from C to B to A.
• C)Supply would decrease, demand would increase and the economy moves from A to D to C.
• D)Supply would increase, demand would increase and the economy moves from D to A to B.