Figure 19-3
-Refer to Figure 19-3.At what level should the Thai government peg its currency to the dollar to make Thai exports cheaper to the United States?

Question

Figure 19-3 
-Refer to Figure 19-3.At what level should the Thai government peg its currency to the dollar to make Thai exports cheaper to the United States?

Quizplus · Accepted Answer

According to the graph, the equilibrium exchange rate is around $.03/baht. To make Thai exports cheaper to the United States, the Thai government should peg its currency below the equilibrium exchange rate, meaning less than $.03/baht. Therefore, the best choice is B.

Figure 19-3 -Refer to Figure 19-3.At What Level Should the Thai Government