Refer to Figure 20.3 for the following questions.
Figure 20.3
-Suppose the above graph in Figure 20.3 represents the market for the British pound under the Bretton Woods System.If the par exchange rate was set at 2 US dollars and the situation persisted,
A) the currency would be overvalued.
B) there would need to be devaluation of the currency.
C) the supply of pounds would be less than the demand for pounds.
D) the supply of pounds would be greater than the demand for pounds.

Question

Refer to Figure 20.3 for the following questions.
Figure 20.3 
-Suppose the above graph in Figure 20.3 represents the market for the British pound under the Bretton Woods System.If the par exchange rate was set at 2 US dollars and the situation persisted,
A) the currency would be overvalued. 
B) there would need to be devaluation of the currency. 
C) the supply of pounds would be less than the demand for pounds. 
D) the supply of pounds would be greater than the demand for pounds.

Quizplus · Accepted Answer

The Answer of Refer to Figure 20.3 for the following questions.
Figure 20.3 
-Suppose the above graph in Figure 20.3 represents the market for the British pound under the Bretton Woods System.If the par exchange rate was set at 2 US dollars and the situation persisted,
A) the currency would be overvalued. 
B) there would need to be devaluation of the currency. 
C) the supply of pounds would be less than the demand for pounds. 
D) the supply of pounds would be greater than the demand for pounds.

Refer to Figure 20.3 for the Following Questions