Refer to the Above Diagram Where D and S Are

question 9

Multiple Choice

Refer to the above diagram where D and S are Canada's demand for and supply of Swiss francs.At the equilibrium exchange rate, E, Canada's balance of payments is in equilibrium.Given a change in demand from D to D' Canada could maintain the dollar price of francs by:

• A)shifting the S curve to the right through the use of domestic expansionary policies.
• B)instituting exchange controls to ration Ed francs to Canadian importers who want Ec francs.
• C)using international monetary reserves to cover the Ec shortage of francs.
• D)using international monetary reserves to cover the cd shortage of francs.

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Definitions:

Propinquity

The tendency to partner with people who live close by.

Propinquity

A concept in social psychology referring to the physical or psychological proximity between people, which can affect their likelihood of forming relationships.

Propinquity

The state of being close to someone or something; proximity; it often influences personal relationships and social interactions.

Endogamy

Marriage to someone within one’s social group.