Post by: Coya19@aol.com on Mar 16, 2019
Question 1
Figure 19-11
Refer to Figure 19-11. The graph above depicts supply and demand for British pounds during a trading day, where the quantity is millions of pounds. In order to support a fixed exchange rate of $2.00 per pound, the British central bank must
◦ buy 0.6 million pounds per trading day.
◦ sell 0.6 million pounds per trading day.
◦ buy 1.2 million pounds per trading day.
◦ sell 1.2 million pounds per trading day.
Question 2
Figure 19-11
Refer to Figure 19-11. The graph above depicts supply and demand for British pounds during a trading day. At a fixed exchange rate of $2.00 per pound, the pound is ________ versus the dollar. A ________ of the pound would correct the fundamental disequilibrium that exists in this market.
◦ undervalued; devaluation
◦ undervalued; revaluation
◦ overvalued; revaluation
◦ overvalued; devaluation
Post by: olderstudent on Mar 16, 2019
Answer 1
buy 1.2 million pounds per trading day.Answer 2
overvalued; devaluation