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The spot exchange rate between the dollar and the Swiss franc is a floating, or flexible,...

The spot exchange rate between the dollar and the Swiss franc is a floating, or flexible, What are the effects of each of the following on this exchange rate? a.There is a large increase in Swiss demand for US exports as US culture becomes more popular in Switzerland. b.There is a large increase in Swiss demand for US investments in US dollar‐denominated financial assets due to a belief that the US economy are imporoving markedly. c. Political uncertainties in Europe lead US investors to shift their financial investments out of Switzerland, back to the US. d. US demand for products imported from Switzerland falls significantly as bad press reports lead Americans to question the quality of Swiss products.

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(a) Increase in Swiss demand for US exports will increase Swiss demand for dollar, which will shift the dollar demand curve rightward, appreciating the dollar and increasing exchange rate.

(b) Increase in Swiss demand for US dollar-denominated assets will increase Swiss demand for dollar, which will shift the dollar demand curve rightward, appreciating the dollar and increasing exchange rate.

(c) US investors shifting their investment from Swiss assets back to US will increase US demand for dollar, which will shift the dollar demand curve rightward, appreciating the dollar and increasing exchange rate.

(d) Lower US demand for Swiss products will decrease the demand for Swiss franc/euro and decrease the supply of US dollar, which will shift the dollar supply curve leftward, appreciating the dollar and increasing exchange rate.

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