In Equilibrium, If $1 = 0

question 227

Multiple Choice

In equilibrium, if $1 = 0.5 pound sterling and 1 pound sterling = 40 Swiss francs, the exchange rate between dollar and franc will be

• A) 1 franc = $0.10.
• B) 1 franc = $0.20.
• C) $1 = 80 francs.
• D) $1 = 20 francs.

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Definitions:

Product Markets

Marketplaces where final goods or services are offered to consumers, businesses, and the government.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale at a given price level, typically upward sloping.

Optimal Level

The most efficient, effective, or desirable point or state for a specific objective or condition.

Shift

Movement of a supply or demand curve on a graph, indicating a change in equilibrium quantity and/or price in the market.