Figure 15.3 Alt text for Figure 15.3: In figure 15.3, a graph illustrates the quantity of bahts traded against the exchange rate.
Long description for Figure 15.3: The x-axis is labelled, quantity of bahts traded, with value 180 marked.The y-axis is labelled exchange rate, Canadian dollar against the baht, with value 0.03 marked.A straight line supply curve, S, slopes up from the bottom left corner to the top right corner.A straight line demand curve, D, slopes down from the top left corner to the bottom right corner.Curves S and D intersect at point (160, 0.30), which is connected to the corresponding x and y-axes values with dotted lines.
-Refer to Figure 15.3.If the Thai government pegs its currency to the dollar at a value above $.03/baht, we would say the currency is

Question

Figure 15.3  Alt text for Figure 15.3: In figure 15.3, a graph illustrates the quantity of bahts traded against the exchange rate.
Long description for Figure 15.3: The x-axis is labelled, quantity of bahts traded, with value 180 marked.The y-axis is labelled exchange rate, Canadian dollar against the baht, with value 0.03 marked.A straight line supply curve, S, slopes up from the bottom left corner to the top right corner.A straight line demand curve, D, slopes down from the top left corner to the bottom right corner.Curves S and D intersect at point (160, 0.30), which is connected to the corresponding x and y-axes values with dotted lines.
-Refer to Figure 15.3.If the Thai government pegs its currency to the dollar at a value above $.03/baht, we would say the currency is

Quizplus · Accepted Answer

If the value of the Thai baht is pegged above $.03/baht, it means that it is overvalued in relation to the Canadian dollar, which is the axis on the y-axis. Therefore, the correct answer is option B.

Figure 153 Alt Text for Figure 15