Figure 14-2

-Refer to Figure 14-2. What are the equilibrium values of the real exchange rate and net exports?
A) 1.4, 100
B) 1, 200
C) .6, 300
D) None of the above are correct.

Question

Figure 14-2
 
-Refer to Figure 14-2. What are the equilibrium values of the real exchange rate and net exports?
A) 1.4, 100 
B) 1, 200 
C) .6, 300 
D) None of the above are correct.

Quizplus · Accepted Answer

The equilibrium values occur where the BP line intersects the NX line. At this point, the real exchange rate is 1 and net exports are 200. Therefore, choice B is the correct answer.

Figure 14-2 -Refer to Figure 14-2. What Are the Equilibrium Values of the Equilibrium