Given the foreign currency market for the Swiss franc, the supply of franc slopes upward, because as the dollar price of the franc rises ?
Correct answer: C. Switzerland's demand for American merchandise rises
- A. America's demand for Swiss merchandise rises
- B. America's demand for Swiss merchandise falls
- C. Switzerland's demand for American merchandise rises
- D. Switzerland's demand for American merchandise falls
Explanation
When the franc becomes more expensive in dollars, Swiss residents have greater purchasing power for U.S. goods and demand more American merchandise. They supply francs in exchange for the dollars needed to buy those goods.
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