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 the United States impose tariffs on imports from 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 the United States impose tariffs on imports from Switzerland,there would occur a (an):

Quizplus · Accepted Answer

If the United States imposes tariffs on imports from Switzerland, demand for Swiss products in the United States will decrease. This will lead to a decrease in the demand for Swiss francs as US consumers will need fewer francs to pay for Swiss goods. As a result, the value of the franc will depreciate, and the dollar will appreciate. Therefore, choice (B) is correct.

The Figure Below Illustrates the Supply and Demand Schedules of Swiss