The demand curve for French plutonium shifts outward, at about the same time as the appearance of the foreign-exchange dollars. What happens to the demand for French Francs?
a. Transaction demand goes up
b. Precautionary demand goes up
c. Speculative demand goes up
C) is the correct answer.
Speculative demand (for money): The need for cash to take advantage of ...
The question pertains to demand and supply and the response correctly answers the question and also provides a brief explanation. Overall, a concise and to the point reply to the question being asked.