The Currency Used in the Duchy of Saxony Is the Ducet.Suppose

question 138

Multiple Choice

The currency used in the Duchy of Saxony is the ducet.Suppose the demand for the Saxonian ducet in the foreign exchange market equals 14,000 - 3,000e and the supply of ducets in the foreign exchange market equals 2,000 + 2,000e,where e is the nominal exchange rate expressed in dollars per ducet.If the ducet is fixed at $3 per ducet,then to maintain this fixed rate the Duchy of Saxony's international reserves must ____________ per period.

• A) decrease by $1,000
• B) decrease by $3,000
• C) decrease by $9,000
• D) increase by $1,000
• E) increase by $3,000

---

Definitions:

Franchising

A business model wherein a business owner licenses their business logo, name, and operating model to an external party or franchisee.

Franchising Relationship

A business model that involves a contractual partnership between a franchisor and franchisee to use the franchisor's brand and operating methods.

Franchisor

A business entity that grants the right to an individual or group to carry out commercial activities using its branding, system, and intellectual property in exchange for a fee and adherence to agreed specifications.

Corporate Brand

The collective identity, values, and personality of a company as perceived by the public, employees, and stakeholders.