$$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Quantity of Euros } \
\text { Supplied }
\end{array} & \text { Price } & \begin{array} { c }
\text { Quantity of Euros } \
\text { Demanded }
\end{array} \
\hline 400 & \$ 1.10 & 100 \
\hline 360 & 1.00 & 200 \
\hline 300 & 0.90 & 300 \
\hline 286 & 0.80 & 400 \
\hline 287 & 0.70 & 500 \
\hline
\end{array}$$ The table shows the supply and demand schedules for the European euro. Under a ?exible exchange-rate system, what will be the rate of exchange for one euro?
A) $0.80
B) $0.90
C) $1.00
D) $1.10

Question

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity of Euros } \
\text { Supplied }
\end{array} & \text { Price } & \begin{array} { c } 
\text { Quantity of Euros } \
\text { Demanded }
\end{array} \
\hline 400 & \$ 1.10 & 100 \
\hline 360 & 1.00 & 200 \
\hline 300 & 0.90 & 300 \
\hline 286 & 0.80 & 400 \
\hline 287 & 0.70 & 500 \
\hline
\end{array}$$ The table shows the supply and demand schedules for the European euro. Under a ?exible exchange-rate system, what will be the rate of exchange for one euro?
A) $0.80
B) $0.90
C) $1.00
D) $1.10

Quizplus · Accepted Answer

Under a flexible exchange-rate system, the equilibrium exchange rate is where the quantity of euros supplied equals the quantity demanded. This occurs at $0.90, where both the quantity supplied and demanded are 300.

The Table Shows the Supply and Demand Schedules for the \hline

The Table Shows the Supply and Demand Schedules for the
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