The FX Rate at the Point Where the Demand and Supply

question 24

Multiple Choice

The FX rate at the point where the demand and supply curves for a currency intersect is called a/an:

• A) balanced exchange rate.
• B) equilibrium exchange rate.
• C) intersection exchange rate.
• D) stable exchange rate.

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Definitions:

Economic Inefficiency

Economic Inefficiency occurs when resources are not allocated optimally, leading to waste or missed opportunities in the production or distribution of goods and services.

Oligopoly

A market structure characterized by a small number of firms which dominate the market, leading to limited competition.

First-Mover Advantage

In game theory, the benefit obtained by the party that moves first in a sequential game. A situation that occurs in a sequential game if the player who gets to move first has an advantage in terms of final outcomes over the player(s) who move subsequently.

Simultaneous Game

A strategic interaction (game) between two or more parties (players) in which every player moves (makes a decision) at the same time.