The Figure Given Below Depicts the Demand and Supply of Brazilian

question 27

Multiple Choice

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.
Figure 21.1

In the figure:
D₁ and D₂: Demand for Brazilian reals
S₁ and S₂: Supply of Brazilian reals

-Refer to Figure 21.1. Determine the equilibrium exchange rate and equilibrium quantity of Brazilian reals, if D1 and S1 are the relevant demand and supply curves for Brazilian reals in this market.

• A) 10 pesos per real and a quantity of 150 reals
• B) 6 pesos per real and a quantity of 250 reals
• C) 8 pesos per real and a quantity of 150 reals
• D) 8 pesos per real and a quantity of 250 reals
• E) 6 pesos per real and a quantity of 200 reals

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