The Figure Above Shows Demand Curves for Dollars in the Foreign

question 46

Multiple Choice

The figure above shows demand curves for dollars in the foreign exchange market.
-The demand curve shifts rightward from D₀ to D₁ when the U.S.interest rate ________ and foreign interest rates are unchanged. The demand curve shifts rightward from D₀ to D₁ when the expected future exchange rate ________.

• A) rises; falls
• B) falls; rises
• C) rises; rises
• D) falls; falls
• E) None of the above answers are correct because the factors mentioned lead to movements along the demand curve and not to shifts of the demand curve.

---

Definitions:

Underextending

The cognitive error where a child applies a word too narrowly, limiting its use to a single object instead of to all objects that belong to a particular category.

Waving Bye-Bye

A common gestural action to express departure or farewell, often one of the first communicative gestures learned by infants.

Underextension

A language development error in which a child applies a word too narrowly, failing to include objects or events that the word should apply to.

Gestures

Movements of the body, especially the hands and arms, that express ideas or feelings.