The figure below illustrates the supply and demand schedules of Swiss francs in a market of freely-floating exchange rates.
Figure 12.1 The Market for Francs

-Refer to Figure 12.1.Should preferences for imports rise in the United States and fall in Switzerland,there would occur a (an):

Question

The figure below illustrates the supply and demand schedules of Swiss francs in a market of freely-floating exchange rates.
Figure 12.1 The Market for Francs
 
-Refer to Figure 12.1.Should preferences for imports rise in the United States and fall in Switzerland,there would occur a (an):

Quizplus · Accepted Answer

An increase in the demand for francs and a decrease in the supply of francs would lead to an increase in the value of the franc and a decrease in the value of the dollar (depreciation of the dollar). This is because buyers in the United States will need to buy more francs to pay for the increased imports from Switzerland, while sellers in Switzerland will have fewer francs to sell due to the decreased demand for their exports.

The Figure Below Illustrates the Supply and Demand Schedules of Swiss