Unsure and confused about what the answers should be Consider the exchange rate between the Malaysian ringgit and the euro. Suppose the Malaysian government and the Eurozone governments agree tofix the exchange rate at 2.5 ringgit per euro, as shown by the grey line on the following graph.Refer to the following graph when answering the questions that follow.EXCHANGE RATE (Ringgit per euro)4.03.51.00.500246812QUANTITY OF EUROS (Billions)Supply of EurosDemand for Euros10At the official ringgit price of euros, there is a1416At the official exchange rate of 2.5 ringgit per euro, the euro isMalaysians pay for European exports than they would with a free-, and the Malaysian ringgit isating exchange rate.of euros in the foreign exchange market.7which means thatSuppose the governments in the Eurozone and Malaysia agree to change the official exchange rate from 2.5 ringgit per euro to 2 ringgit per euro. Theaction represents aof the euro and aof the ringgit.

Demand is the individuals wish to purchase a specific good or service. Market demand is the demand…

onsider the exchange rate between the Malaysian ringgit and the euro. Suppose the Malaysian government and the Eurozone governments agree to the exchange rate at 2.5 ringgit per euro, as shown by the grey line on the following graph. efer to the following graph when answering the questions that follow. EXCHANGE RATE (Ringgit per euro) 4.0 1.5 1.0 0.5 0 0 2 4 6 8 12 QUANTITY OF EUROS (Billions) 10 Supply of Euros At the official ringgit price of euros, there is a Demand for Euros 14 16 At the official exchange rate of 2.5 ringgit per euro, the euro is , and the Malaysian ringgit is Malaysians pay for European exports than they would with a free-floating exchange rate. of euros in the foreign exchange market. which means that Suppose the governments in the Eurozone and Malaysia agree to change the official exchange rate from 2.5 ringgit per euro to 2 ringgit per euro. The