The Figure Given Below Depicts the Demand and Supply of Brazilian

question 97

Multiple Choice

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.Figure 22.1
In the figure:
D₁ and D₂: Demand for Brazilian reals
S₁ and S₂: Supply of Brazilian reals

-In 1991, the French mineral water Perrier was temporarily taken off the market in the United States because of suspected impurities. Other things equal, this action brought about:

• A)an increase in the demand for Perrier.
• B)a decrease in the price of Perrier in terms of French francs.
• C)a depreciation of the French franc relative to the U.S. dollar.
• D)an appreciation of the French franc relative to the U.S. dollar.
• E)an increase in the supply of dollars in the foreign exchange market.

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Definitions:

Rank Assigned

A method of assigning ordinal positions to items that are being compared, such as in the sorting of data.

Nonparametric Tests

Statistical tests that do not assume a specific distribution in the data.

Nominal Data

Data categorized without a natural order or rank, such as names, labels, or categories.

Ordinal Data

Data that can be categorized into a defined order or ranking, but the intervals between the categories are not necessarily consistent.