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 reflects the effect of a decrease in U.S.tourism in Denmark?
A) A
B) B
C) C
D) D
E) E
Correct Answer:
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