The Following Figure Depicts the Demand for Chinese Yuan in the Foreign

question 3

Multiple Choice

The following figure depicts the demand for Chinese yuan in the foreign currency exchange market. Use this figure to answer the questions that follow.

-If the interest rates in China rise relative to interest rates in the United States,the demand curve in the figure above:

• A) will not shift because interests rates are not related to exchange rates.
• B) will not shift because interests rates only affect the supply curve.
• C) can either increase from D₁ to D₂ or decrease from D₁ to D₃.
• D) will increase from D₁ to D₂.
• E) will decrease from D₁ to D₃.

---

Definitions:

Natural Philosophy

An early term for the study of the nature and the physical universe, preceding the modern science known as physics.

Political Action Committees

Organizations that collect funds to donate to political campaigns or spend on behalf of political agendas.

Political Campaigns

Organized efforts to influence the decision making process within a specific group, often associated with the electoral process where candidates seek public office.

Celebrity Politicians

Individuals who leverage their fame and public recognition from careers in entertainment or other non-political fields to enter into politics.