Consider the supply-demand framework for the British pound relative to the U.S.dollar shown in the following chart.The exchange rate is currently $1.80 = £1.00.Which of the following is correct?
A)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply.
B)At an exchange rate of $1.80 = £1.00,supply for British pounds exceeds demand.
C)Under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00.
D)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply.Additionally,under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00.

Question

Consider the supply-demand framework for the British pound relative to the U.S.dollar shown in the following chart.The exchange rate is currently $1.80 = £1.00.Which of the following is correct? 
A)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply. 
B)At an exchange rate of $1.80 = £1.00,supply for British pounds exceeds demand. 
C)Under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00. 
D)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply.Additionally,under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00.

Quizplus · Accepted Answer

The Answer of Consider the supply-demand framework for the British pound relative to the U.S.dollar shown in the following chart.The exchange rate is currently $1.80 = £1.00.Which of the following is correct? 
A)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply. 
B)At an exchange rate of $1.80 = £1.00,supply for British pounds exceeds demand. 
C)Under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00. 
D)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply.Additionally,under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00.

Consider the Supply-Demand Framework for the British Pound Relative to the U.S.dollar