The Following Question Are Based on the Following Diagrams, Showing

question 15

Multiple Choice

The following question are based on the following diagrams, showing the demand and supply of U.S. dollars in terms of Danish krone. For all cases D₀ and S₀ are initial demand and supply and D₁ and S₁ are new demand and supply. Assume an initial exchange rate of 9 krone to $1.

-Which diagram best illustrates the effect of an increase in the U.S.demand for Danish cheese and cookware?

• A) A
• B) B
• C) C
• D) D
• E) E

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