The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-When the U.S. dollar depreciates in relation to the Swiss franc:
A)a U.S. importer will need more dollars to pay for an invoice denominated in Swiss francs.
B)a Swiss exporter will receive more Swiss francs for an invoice denominated in the exporter's currency.
C)Swiss imports of U.S. goods will fall.
D)the Swiss franc is now worth less in terms of the U.S. dollar.
E)a U.S. exporter will receive fewer dollars for an invoice denominated in Swiss francs.

Question

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2
 
-When the U.S. dollar depreciates in relation to the Swiss franc:
A)a U.S. importer will need more dollars to pay for an invoice denominated in Swiss francs. 
B)a Swiss exporter will receive more Swiss francs for an invoice denominated in the exporter's currency. 
C)Swiss imports of U.S. goods will fall. 
D)the Swiss franc is now worth less in terms of the U.S. dollar. 
E)a U.S. exporter will receive fewer dollars for an invoice denominated in Swiss francs.

Quizplus · Accepted Answer

When the U.S. dollar depreciates against the Swiss franc, it means that more U.S. dollars are needed to buy the same amount of Swiss francs. Therefore, a U.S. importer will need more dollars to pay for an invoice denominated in Swiss francs.

The Figure Given Below Depicts the Foreign Exchange Market for British