Referring to the graph above, suppose that the demand for the American dollar shifts from D1 to D2. What might be the reason for this shift?

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
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US $ in Canadian $
02
D1
H J
Quantity of US $
Note: If the image does not appear, right-click on the placeholder and choose Show picture or
View image.
Referring to the graph above, suppose that the demand for the American dollar shifts
from D1 to D2. What might be the reason for this shift?
a)
The prices of Canadian goods and services have increased relative to
American prices.
b) The Canadian economy has entered a boom period.
O c)
The prices of American goods and services have increased relative to
Canadian prices.
d) The Canadian dollar has depreciated.
O e) Interest rates in the USA have decreased relative to Canadian rates.
Transcribed Image Text:US $ in Canadian $ 02 D1 H J Quantity of US $ Note: If the image does not appear, right-click on the placeholder and choose Show picture or View image. Referring to the graph above, suppose that the demand for the American dollar shifts from D1 to D2. What might be the reason for this shift? a) The prices of Canadian goods and services have increased relative to American prices. b) The Canadian economy has entered a boom period. O c) The prices of American goods and services have increased relative to Canadian prices. d) The Canadian dollar has depreciated. O e) Interest rates in the USA have decreased relative to Canadian rates.
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