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 21.1 
In the figure:
D1 and D2: Demand for Brazilian reals
S1 and S2: Supply of Brazilian reals
Refer to Figure 21.1.The demand curves shown for Brazilian reals are based on:
A) the supply of Brazilian reals in the market.
B) the demand for Mexican pesos.
C) Brazilian demand for Brazilian products.
D) Brazilian demand for Mexican products.
E) Mexican demand for Brazilian products.
Correct Answer:
Verified
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