Question

Seat Map Air Fr Abigail Hudson (username: axhudson) Attempt 1 Written: May 28, 2019 4:19 PM - May 28, 2019 5:03 PM Submission View Released: Nov 27, 2017 9:28 AM Question 14 Exhibit 18-3 Canadiah sollars per Swiss ra Foreign exchange (objective F3) Which of the following is represented by Exhibit 18-3 Canadian exports to Switzerland decrease. The Swiss franc is devalued. An increase in the Swiss demand for Canadian dollars An increase in the Canadian demand for Swiss francs. The Swiss franc depreciates. Question 26 MacBook Air 000FA FT F2 F3 FS F7 FB

Answer 1

The answer is (b) The Swiss franc is devalued.

Given in the diagram, the demand curve has shifted to the right. That means the demand has been increased. The y-axis shows the value of Canadian dollars per Swiss franc.

When the supply is being constant and at the same time the demand has been increased. This has caused to increase the value of Canadian dollars per Swiss franc. This means that more products can be bought now with the same amount of Canadian dollar. This specifically by the rules of appreciation and depreciation gives us that the Swiss franc has been devalued relatively to the Canadian dollar.