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Figure 151 Shows the Market for the Swiss Franc

Question 48

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Figure 15.1 shows the market for the Swiss franc.In the figure,the initial demand for marks and supply of marks are depicted by D0 and S0 respectively.
Figure 15.1.The Market for the Swiss Franc Figure 15.1 shows the market for the Swiss franc.In the figure,the initial demand for marks and supply of marks are depicted by D<sub>0</sub> and S<sub>0</sub> respectively. Figure 15.1.The Market for the Swiss Franc -Refer to Figure 15.1.Suppose the United States decreases investment spending in Switzerland,thus reducing the demand for francs from D<sub>0</sub> to D<sub>2</sub>.Under a floating exchange rate system,the new equilibrium exchange rate would be: A) $0.40 per franc B) $0.50 per franc C) $0.60 per franc D) $0.70 per franc
-Refer to Figure 15.1.Suppose the United States decreases investment spending in Switzerland,thus reducing the demand for francs from D0 to D2.Under a floating exchange rate system,the new equilibrium exchange rate would be:


A) $0.40 per franc
B) $0.50 per franc
C) $0.60 per franc
D) $0.70 per franc

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