Which of the following could have led to the shifts illustrated ...

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Which of the following could have led to the shifts illustrated in the figure above?
 
  i. The U.S. exchange rate was expected to depreciate between 2001 and 2009.
  ii. The U.S. exchange rate was expected to appreciate between 2001 and 2009.
  iii. The U.S. interest rate rose relative to interest rates in other countries between 2001 and 2009.
  A) i only B) ii only C) iii only D) i and iii E) ii and iii

Question 2

In the figure below, label the axes and then draw a demand for money curve. Illustrate an increase in the demand for money.
 
  What will be an ideal response?

[mbcrismon]

Answer to Question 1

A

Answer to Question 2

A completed figure is above. An increase in the demand for money is reflected in a rightward shift of the demand for money curve, as in the figure with the shift from MD1 to MD2.