Refer to Figure 18.1.If there were a perception that the value of Thai assets would decrease, the equilibrium exchange rate would move to _____.
A)A
B)B
C)F
D)E
E)G

Question

Quizplus · Accepted Answer

If there is a perception that the value of Thai assets would decrease, investors would likely sell Thai assets, leading to an increase in the supply of the Thai currency in the foreign exchange market. This would cause the currency to depreciate, moving the equilibrium exchange rate to a lower level, such as point E.