The Graph Shows the Supply and Demand Curves for Dollars

question 80

Multiple Choice

The graph shows the supply and demand curves for dollars in the pound/dollar market. Assume that D1 and S1 are the initial demand for and supply of dollars. The exchange rate will be

• A) $5 equals 1 pound.
• B) $4 equals 1 pound.
• C) $1 equals 5 pounds.
• D) $0.20 equals 1 pound.

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Definitions:

Wage Rate

The compensation paid to employees for their labor per time unit, often quantified on an hourly or annual basis.

Quantity of Labor Demanded

The total amount of hours worked that employers are willing to hire at a given wage rate.

Demand for Labor

The employers' need for workers, which varies based on factors like economic conditions, wages, and the skill level required for the jobs.

Wage Rate

The amount of compensation paid per unit of time or piece of work for employed services.