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-In the Above Figure, Suppose the Value of the European

Question 160

Multiple Choice

-In the above figure, suppose the value of the European euro is P<sub>1</sub> and U.S. demand for French wine declines. The effect on the franc can be shown by A) an increase in the value of the euro to P<sub>2</sub>. B) the excess demand of euro equal to Q<sub>3</sub> - Q<sub>1</sub>. C) the decrease in the value of the euro to P<sub>0</sub>. D) a shift in the demand for euros from D<sub>1</sub> to D<sub>0</sub>, but no change in the value of the euro.
-In the above figure, suppose the value of the European euro is P1 and U.S. demand for French wine declines. The effect on the franc can be shown by


A) an increase in the value of the euro to P2.
B) the excess demand of euro equal to Q3 - Q1.
C) the decrease in the value of the euro to P0.
D) a shift in the demand for euros from D1 to D0, but no change in the value of the euro.

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