Imagine a world where only Canada and Switzerland exist. If there is a surplus of Swiss francs available in the foreign exchange market, what does this indicate about the current account balances?

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Canada's current account is running a surplusSwitzerland's current account is experiencing a deficitCanada's current account is balancedSwitzerland's current account is balancedNone of the above

Explanation

An excess supply of Swiss francs means more francs are being sold than bought, indicating Switzerland is spending more abroad than it is earning, which corresponds to a current account deficit for Switzerland.