The supply of francs is derived from the desire of the Swiss to purchase German goods, make investments in Germany, repay debts to German lenders, and extend transfer payments to German residents.

Question

Quizplus · Accepted Answer

The supply of francs in the foreign exchange market is indeed derived from the desire of Swiss entities to engage in transactions that require them to convert francs into another currency, such as euros for purchasing German goods, making investments in Germany, repaying debts to German lenders, and making transfer payments to German residents. These activities increase the supply of francs as they are sold for euros or other currencies to complete these transactions.

The Supply of Francs Is Derived from the Desire of the Swiss