Figure 12.1 The Market for Francs
-Refer to Figure 12.1.If Switzerland experienced a disastrous wheat-crop failure, leading to additional wheat imports from the United States, there would occur an

Question

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Figure 12.1 The Market for Francs 
-Refer to Figure 12.1.If Switzerland experienced a disastrous wheat-crop failure, leading to additional wheat imports from the United States, there would occur an

Quizplus · Accepted Answer

When Switzerland imports more wheat from the United States due to a crop failure, it needs to buy more dollars to pay for these imports. This leads to an increase in the supply of Swiss francs in the foreign exchange market as they exchange francs for dollars, resulting in an appreciation of the dollar due to higher demand for it.

​ Figure 12.1 the Market for Francs

Figure 12.1 the Market for Francs