The Table Indicates the Dollar Price of Libras, the Currency

question 28

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { (1) } & \text { (2) } & \text { (3) } \\\hline \begin{array} { c } \text { Quantity of Libras } \\\text { Demanded (Billions) }\end{array} & \begin{array} { c } \text { Dollar Price } \\\text { of Libras }\end{array} & \begin{array} { c } \text { Quantity of Libras } \\\text { Supplied (Billions) }\end{array} \\\hline 100 & \$ 5 & 325 \\\hline 200 & 4 & 200 \\\hline 300 & 3 & 100 \\\hline 400 & 2 & 75 \\\hline\end{array}$$ The table indicates the dollar price of libras, the currency used in the hypothetical nation of Libra. Assume that a system of ?exible exchange rates is in place. The equilibrium dollar price of libras is

• A) $5.
• B) $4.
• C) $3.
• D) $2.

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Definitions:

Dummy Variable

A binary variable used in regression models to represent categorical data by encoding categories as 0 or 1.

Indicator Variable

A variable that takes the value of 1 if a certain condition is true and 0 if it is not.

Dependent Variable

The variable in an experiment or study that is expected to change in response to changes in the independent variable.

Stepwise Regression

A method of fitting regression models in which predictors are added or removed based on specific criteria, such as their statistical significance.