Refer to the Graph Shown

question 102

Multiple Choice

Refer to the graph shown. An economy is in both short- and long-run equilibrium at point(s) :

• A)A.
• B)B only.
• C)C only.
• D)Both B and C.

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Definitions:

Exchange Rate

The exchange rate is the price at which one currency can be exchanged for another currency, affecting trade and economic relations between countries.

Exchange Rates

The rate at which one currency can be exchanged for another currency, influencing international trade and economic balance between countries.

Arbitrageurs

Individuals or entities that take advantage of price differences in different markets by buying low in one and selling high in another to make profits.

Central Banks

Major financial institutions that manage a country's currency supply, interest rates, and serve as a lender of last resort to the banking sector.