Figure 30-3
-Refer to Figure 30-3. Which of the following is true?
A) U.S imports are more expensive at exchange rates greater than $.02/rupee than at the equilibrium exchange rate.
B) The rupee is overvalued at exchange rates less than $.02/rupee.
C) To achieve an exchange rate greater than $.02/rupee, the Reserve Bank of India must buy surplus dollars with rupees.
D) Indian exports to the United States are more expensive at exchange rates greater than $.02/rupee than at the equilibrium exchange rate.
Correct Answer:
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