Refer to Figure 15.3 for the following questions.
Figure 15.3

-If the government of Thailand wants to peg the baht to the United States (US)dollar at a value below 0.03 baht per US dollar, as seen in Figure 15.3, then:
A)the baht will be overvalued.
B)the supply of baht for US dollars will be greater than the demand of baht for US dollars.
C)there will be a shortage of baht.
D)the par exchange rate will be set above the equilibrium exchange rate.

Question

Refer to Figure 15.3 for the following questions.
Figure 15.3
 
-If the government of Thailand wants to peg the baht to the United States (US)dollar at a value below 0.03 baht per US dollar, as seen in Figure 15.3, then:
A)the baht will be overvalued. 
B)the supply of baht for US dollars will be greater than the demand of baht for US dollars. 
C)there will be a shortage of baht. 
D)the par exchange rate will be set above the equilibrium exchange rate.

Quizplus · Accepted Answer

The Answer of Refer to Figure 15.3 for the following questions.
Figure 15.3
 
-If the government of Thailand wants to peg the baht to the United States (US)dollar at a value below 0.03 baht per US dollar, as seen in Figure 15.3, then:
A)the baht will be overvalued. 
B)the supply of baht for US dollars will be greater than the demand of baht for US dollars. 
C)there will be a shortage of baht. 
D)the par exchange rate will be set above the equilibrium exchange rate.

Refer to Figure 15.3 for the Following Questions