Exhibit 16-5

-Refer to the graph in the exhibit.What is the free market exchange rate?

Question

Exhibit 16-5
 
-Refer to the graph in the exhibit.What is the free market exchange rate?

Quizplus · Accepted Answer

The free market exchange rate is determined by the intersection of the supply and demand curves for a currency. Since the graph is not visible, the correct answer cannot be directly identified from the provided options. However, the explanation implies that the correct answer would be where supply equals demand, which typically results in a specific value rather than a range. Without the graph, we can infer that the correct answer would be a specific rate, but since the question asks for a rate greater than a certain value, it suggests an understanding that the equilibrium (free market exchange rate) is above a certain threshold, hence ">$0.53" is chosen based on the structure of the question.

Exhibit 16-5 -Refer to the Graph in the Exhibit.What Is the Free