In the market for foreign-currency exchange, capital flight shifts the A. demand curve right. B. demand curve left. C. supply curve right. (Correct) D. supply curve left. I know the answer is C, however I don't know why.
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Capital flight refers to the rapid movement of large sums of money out of a country, typically due to economic instability or the expectation of unfavorable conditions. Show more…
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This is a graph of the foreign exchange market. The y-axis is labeled Exchange Rate (euros per dollar), and the x-axis is labeled Quantity of dollars traded. There are two parallel, downward-sloping demand curves, labeled D1 and D2. D1 is above and to the right of D2. There are also two parallel, upward sloping supply curves, labeled S1 and S2. S1 is above and to the left of S2. These four lines intersect at four points. Point A is the left-most point, which is the intersection of S1 and D2. Point B is the uppermost point, which is the intersection of S1 and D1. Point C is the right-most point, where S2 and D1 intersect. And point D is the lowest point, where S2 and D2 intersect. The depreciation of the dollar is represented as a movement from which point to which point? Select all that apply. B to D D to C C to D A to B D to B
Crystal W.
This is a graph of the foreign exchange market. The y-axis is labeled Exchange Rate (euros per dollar), and the x-axis is labeled Quantity of dollars traded. There are two parallel, downward-sloping demand curves, labeled D1 and D2. D1 is above and to the right of D2. There are also two parallel, upward sloping supply curves, labeled S1 and S2. S1 is above and to the left of S2. These four lines intersect at four points. Point A is the left-most point, which is the intersection of S1 and D2. Point B is the uppermost point, which is the intersection of S1 and D1. Point C is the right-most point, where S2 and D1 intersect. And point D is the lowest point, where S2 and D2 intersect.
This is a graph of the foreign exchange market. The y-axis is labeled Exchange Rate (euros per dollar), and the x-axis is labeled Quantity of dollars traded. There are two parallel, downward-sloping demand curves, labeled D1 and D2. D1 is above and to the right of D2. There are also two parallel, upward sloping supply curves, labeled S1 and S2. S1 is above and to the left of S2. These four lines intersect at four points. Point A is the left-most point, which is the intersection of S1 and D2. Point B is the uppermost point, which is the intersection of S1 and D1. Point C is the right-most point, where S2 and D1 intersect. And point D is the lowest point, where S2 and D2 intersect. Europe experiences an economic boom. Assuming all else remains constant, this would be represented as a movement from B to C A to B A to D C to D
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