Figure 158 Alt Text for Figure 15

question 11

Multiple Choice

Figure 15.8 Alt text for Figure 15.8: In figure 15.8, a graph illustrates the quantity of rupees traded against the exchange rate.
Long description for Figure 15.8: The x-axis is labelled, quantity of rupees traded.The y-axis is labelled exchange rate, Canadian dollar against the rupee, with value 0.02 marked.A straight line supply curve, S, slopes up from the bottom left corner to the top right corner.A straight line demand curve, D, slopes down from the top left corner to the bottom right corner.Curves S and D intersect at point with a y-axis value of 0.02, which is connected to the corresponding y-axis value with a dotted line.
-Refer to Figure 15.8.If the Indian government pegs its currency to the Canadian dollar at a value below $.02/rupee, we would say the currency is

• A)undervalued.
• B)overvalued.
• C)parity valued.
• D)equilibrium valued.
• E)depreciating.

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