- Suppose the supply of dollars decreased from S 2 to S 1 in Figure 36.3.As a result of this change,

The decrease in the supply of dollars will make the dollar more expensive relative to the Swiss franc. This will make Swiss chocolate imports to the United States more expensive, and U.S. computer exports to Switzerland less expensive.

- Suppose the supply of dollars decreased from S 2 to S 1 in Figure 36.3.As a result of this change,

The decrease in the supply of dollars will make the dollar more expensive relative to the Swiss franc. This will make Swiss chocolate imports to the United States more expensive, and U.S. computer exports to Switzerland less expensive.

Solved

- Suppose the Supply of Dollars Decreased from S₂ to S₁

Question 63

Multiple Choice

- Suppose the supply of dollars decreased from S₂ to S₁ in Figure 36.3.As a result of this change,

A) Swiss chocolate imports to the United States will be lower-priced.
B) U.S.computer exports to Switzerland will be lower-priced.
C) A trade deficit will be created in Switzerland.

Correct Answer: