The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-A fixed exchange rate can be an equilibrium rate even if there is a permanent shift in the foreign exchange market supply and demand curves.

Question

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2
 
-A fixed exchange rate can be an equilibrium rate even if there is a permanent shift in the foreign exchange market supply and demand curves.

Quizplus · Accepted Answer

A permanent shift in the foreign exchange market supply and demand curves would result in a new equilibrium exchange rate. A fixed exchange rate would no longer be an equilibrium rate in this scenario.

The Figure Given Below Depicts the Foreign Exchange Market for British