Refer to the Above Diagram Where D and S Are

question 35

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.Under a system of fixed exchange rates, the shift in demand from D to D' will cause:

• A)Canada to increase its stocks of international monetary reserves.
• B)a Swiss balance of payments deficit.
• C)a Canadian balance of payments deficit.
• D)a Canadian balance of payments surplus.

---

Definitions:

Odorless

Lacking a detectable smell.

Liquid

A substance that flows freely but is of constant volume, having a consistency like that of water or oil.

Metabolism

The chemical processes that occur within a living organism in order to maintain life, involving anabolic and catabolic reactions.

Growth

An increase in size, number, value, or strength; in biology, it's the process by which organisms increase in size through cell multiplication.