The following question are based on the following diagrams, showing the demand and supply of U.S. dollars in terms of Danish krone. For all cases D₀ and S₀ are initial demand and supply and D₁ and S₁ are new demand and supply. Assume an initial exchange rate of 9 krone to $1.

-Which diagram best illustrates the effect of an increase in the U.S.demand for Danish cheese and cookware?
A) A
B) B
C) C
D) D
E) E

Question

The following question are based on the following diagrams, showing the demand and supply of U.S. dollars in terms of Danish krone. For all cases D₀ and S₀ are initial demand and supply and D₁ and S₁ are new demand and supply. Assume an initial exchange rate of 9 krone to $1.
 
-Which diagram best illustrates the effect of an increase in the U.S.demand for Danish cheese and cookware?
A) A 
B) B 
C) C 
D) D 
E) E

Quizplus · Accepted Answer

Diagram C best illustrates the effect of an increase in the U.S. demand for Danish cheese and cookware by showing a rightward shift in the demand curve. This shift indicates a higher quantity demanded at each price level, which is consistent with an increase in demand.

The Following Question Are Based on the Following Diagrams, Showing