The Figure Given Below Depicts the Foreign Exchange Market for British

question 121

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Under a fixed exchange-rate system, in order to maintain the exchange rate:

• A)governments must adopt a laissez-faire economic policy.
• B)all trading partners must enjoy the same level of economic growth.
• C)currencies must be inconvertible.
• D)the imports of one country must equal the exports of its trading partner.
• E)governments must intervene in the foreign exchange market.

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Definitions:

Duopoly

A market structure characterized by two producers or sellers dominating a particular industry or sector.

Profit

is the financial gain made in a transaction or business operation, calculated as the difference between revenue and costs.

Collude

The act of cooperating or conspiring, especially in a deceitful way, typically between competitors to fix prices or rig markets.

Oligopolists

Oligopolists are firms in a market where a small number of competitors hold significant market share, enabling them to influence market conditions.