Figure 30-11
-Refer to Figure 30-11. The graph above depicts supply and demand for British pounds during a trading day. At a fixed exchange rate of $2.00 per pound, the pound is ________ versus the dollar. A ________ of the pound would correct the fundamental disequilibrium that exists in this market.

Question

Figure 30-11 
-Refer to Figure 30-11. The graph above depicts supply and demand for British pounds during a trading day. At a fixed exchange rate of $2.00 per pound, the pound is ________ versus the dollar. A ________ of the pound would correct the fundamental disequilibrium that exists in this market.

Quizplus · Accepted Answer

At a fixed exchange rate of $2.00 per pound, if the supply of pounds exceeds the demand, the pound is overvalued. A devaluation would lower the exchange rate, correcting the disequilibrium by making pounds cheaper and increasing demand.

Figure 30-11 -Refer to Figure 30-11. the Graph Above Depicts Supply and Depicts