The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.Figure 22.1
In the figure:
D 1 and D 2 : Demand for Brazilian reals
S 1 and S 2 : Supply of Brazilian reals

-The supply of Thai baht in the foreign exchange market originates with:
A)tourists who go on vacation to Thailand.
B)the export of Thai oranges and other goods.
C)Thai residents who wish to purchase goods from other countries.
D)the Thai royal family.
E)Thai central bank intervention to stop the peseta from depreciating.

Question

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.Figure 22.1
In the figure:
D 1 and D 2 : Demand for Brazilian reals
S 1 and S 2 : Supply of Brazilian reals
 
-The supply of Thai baht in the foreign exchange market originates with:
A)tourists who go on vacation to Thailand. 
B)the export of Thai oranges and other goods. 
C)Thai residents who wish to purchase goods from other countries. 
D)the Thai royal family. 
E)Thai central bank intervention to stop the peseta from depreciating.

Quizplus · Accepted Answer

The supply of Thai baht in the foreign exchange market originates from Thai residents who wish to purchase goods from other countries, as they need to exchange baht for foreign currency to make these purchases.

The Figure Given Below Depicts the Demand and Supply of Brazilian