In determining the exchange rate between U.S.dollars and Swiss francs, all of the following are assumed constant along the supply curve for francs except one.Which is not assumed constant?

Question

Quizplus · Accepted Answer

The price of the Swiss franc is directly related to the exchange rate, so it cannot be assumed to be constant along the supply curve for francs. The other options (U.S. interest rates, Swiss income, expected rates of inflation in the U.S. and Switzerland) can be assumed constant along the supply curve for francs.

In Determining the Exchange Rate Between U