Question

If Americans suddenly wanted European products because they were deemed more fashionable, the: A. demand curve...

If Americans suddenly wanted European products because they were deemed more fashionable, the:

A. demand curve for the euro would shift right. B. demand curve for the euro would shift left. C. supply curve for the euro would shift right. D. supply curve for the euro would shift left.

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Answer #1

Answer - When the demand/ supply for products changes due to factors other than change in the price level then it is movement along the demand/ supply curve and when the demand/supply changes due to change in factors other than price then it is a shift in the demand/supply curve. In this case the demand for european product rises due to changes in taste and preferences ie., change in factors other than price yhus it is a shift in demand curve to the right. It means there will be a rightward shift in the demand curve for products.

The correct answer is A because the Euro becomes more valueable as it’s demand increases because of increase in European furniture andbthus more currency will be demanded by the Americans. This will shift the demand curve rightwards.

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