The Graph Below Shows the Supply and Demand for Swiss

question 94

Multiple Choice

The graph below shows the supply and demand for Swiss francs in the absence of any intervention by the central monetary authorities.$0.25 is the value of the franc fixed by the central bank.Which of the following is correct?

• A) The Swiss franc is overvalued.
• B) Switzerland's balance of payments is likely to be in large surplus.
• C) At the $0.25 value there is an excess demand for Swiss francs.
• D) At the $0.20 value there is an excess supply of Swiss francs.

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Definitions:

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