The Figure Below Illustrates the Supply and Demand Schedules of Swiss

question 161

Multiple Choice

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 Swiss labor productivity rise,leading to a decrease in Swiss manufacturing costs,there would occur a (an) :

• A) Increase in the supply of francs and a depreciation of the dollar
• B) Increase in the supply of francs and an appreciation of the dollar
• C) Decrease in the demand for francs and an appreciation of the dollar
• D) Increase in the demand for francs and a depreciation of the dollar