In winter, Europeans and Americans flock to Switzerland to ski. We would expect to see the Swiss franc
a. depreciate because there is an increase in the demand for Swiss goods and services, which means an increase in the demand for Swiss francs
b. appreciate because there is an increase in the demand for Swiss goods and services, which means a decrease in the demand for Swiss francs
c. remain fixed because the demand for Swiss goods and services is counterbalanced by the supply of Swiss goods and services
d. appreciate because there is an increase in the demand for Swiss goods and services, which means an increase in the demand for Swiss francs
e. restored to equilibrium because the summer months see Swiss tourists in Europe and the U.S.
D
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When we look at exchange rates btwn two countries, what is the relationship between the exchange rate expressed in units of the domestic currency and the exchange rate expressed in units of the foreign currency?
a. They are both equal to one. b. They cancel each other out. c. One is always the reciprocal of the other. d. They can never coexist.
If the interest rate is 5 percent, what is the present value of $100 that will be received 3 years from now?
A) $90.70 B) $86.38 C) $115.00 D) $13.62