The diagram shows the demand for sterling and the supply of sterling in the foreign exchange markets.
Other things being equal, if UK interest rates increase, what is likely to happen to the demand and supply curves in the diagram?
1 )
demand curve: shifts to left / supply curve: shifts to left
2 )
demand curve: shifts to right / supply curve: shifts to right
3 )
demand curve: shifts to left / supply curve: shifts to right
demand curve: shifts to right / supply curve: shifts to left
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