Multiple Choice
The figure below illustrates the supply and demand schedules of Swiss francs in a market of freely-floating exchange rates.
Figure 12.1 The Market for Francs
-Refer to Figure 12.1.Should real interest rates in the United States rise relative to real interest rates in Switzerland,there would occur a (an) :
A) Increase in the demand for francs--decrease in the supply of francs-depreciation of the dollar
B) Increase in the demand for francs--decrease in the supply of francs-appreciation of the dollar
C) Decrease in the demand for francs--increase in the supply of francs-appreciation of the dollar
D) Decrease in the demand for francs--decrease in the supply of francs-depreciation of the dollar
Correct Answer:

Verified
Correct Answer:
Verified
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