Post by: jjjetplane on Mar 16, 2019
Figure 19-4
Refer to Figure 19-4. The equilibrium exchange rate is at A, $3/pound. Suppose the British government pegs its currency at $4/pound. Speculators expect that the value of the pound will drop and this shifts the demand curve for pounds to D
2. After the shift,
◦ there is a shortage of pounds equal to 600 million.
◦ there is a surplus of pounds equal to 400 million.
◦ there is a shortage of pounds equal to 400 million.
◦ there is a surplus of pounds equal to 600 million.
◦ there is a shortage of pounds equal to 200 million.
Post by: FergA on Mar 16, 2019
Post by: jjjetplane on Mar 16, 2019
Post by: FergA on Mar 16, 2019