Chapter 8R, Problem 11MCQ

To determine

To find:

Fact for the exchange rate of bern.

Answer to Problem 11MCQ

Option A is correct.

Explanation of Solution

Option A is correct.

It takes $1.50 to buy a bern.

On the y axis, rate of exchange is mentioned and on x-axis, quantity of berns is mention. So, at equilibrium, $1.50 is used to buy a bern.

Option B is incorrect.

Option C is incorrect.

Option D is incorrect.

Option E is incorrect.

Economics Concept Introduction

The exchange rate of a national currency is determined by its relative demand and supply in the foreign exchange market. For example, the price of Yuan in U.S.