The Demand for the Franconian Franc in the Foreign Exchange

question 11

Multiple Choice

The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 3 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:

• A)decrease by 9,000 dollars per period
• B)increase by 9,000 dollars per period
• C)decrease by 3,000 dollars per period
• D)increase by 3,000 dollars per period

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Definitions:

Appetites

Natural desires or cravings, especially for food or pleasure.

Rest Cure

A medical treatment used in the late 19th and early 20th centuries, prescribing complete rest, often for mental health issues, highly criticized for its use on women.

Silas Weir Mitchell

A 19th-century American physician known for his work on nerve injuries and the rest cure, especially relating to the treatment of women with "hysteria."

Psychological Treatment

Methods and practices used by healthcare professionals to treat mental health issues and disorders, including therapy and counseling.