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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