Figure 30-3 -Refer to Figure 30-3. Which of the Following Is True

question 50

Multiple Choice

Figure 30-3

-Refer to Figure 30-3. Which of the following is true?

• A) U.S imports are more expensive at exchange rates greater than $.02/rupee than at the equilibrium exchange rate.
• B) The rupee is overvalued at exchange rates less than $.02/rupee.
• C) To achieve an exchange rate greater than $.02/rupee, the Reserve Bank of India must buy surplus dollars with rupees.
• D) Indian exports to the United States are more expensive at exchange rates greater than $.02/rupee than at the equilibrium exchange rate.

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Definitions:

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San Jose Scale

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