Author Question: Refer to Figure 19-4.The equilibrium exchange rate is atA, $3/pound. Suppose the British ... (Read 294 times)

jessicacav · **on:** Mar 16, 2019

Question 1

Figure 19-3

Refer to Figure 19-3. If the Thai government pegs its currency to the dollar at a value above $.03/baht, we would say the currency is

◦ undervalued.
◦ overvalued.
◦ parity valued.
◦ equilibrium valued.

Question 2

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. At the pegged exchange rate,

◦ 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.

skipfourms123 · **Reply #1 on:** Mar 16, 2019

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