Figure 11.2. Market for Francs

-Refer to Figure 11.2.A shift in the demand for francs from D₀ to D₁, or a shift in the supply of francs from S₀ to S₂, would result in a(n)

Question

Figure 11.2. Market for Francs -Refer to Figure 11.2.A shift in the demand for francs from D₀ to D₁, or a shift in the supply of francs from S₀ to S₂, would result in a(n)

Quizplus · Accepted Answer

A shift in demand for francs to the right (D₀ to D₁) or a shift in supply of francs to the left (S₀ to S₂) would result in an increase in the value of francs relative to the dollar. This means that it would take more dollars to purchase one franc, resulting in a depreciation of the dollar against the franc. Therefore, the best option is A) depreciation in the dollar against the franc.