Consider the Supply-Demand Framework for the British Pound Relative to the U.S.dollar

question 17

Multiple Choice

Consider the supply-demand framework for the British pound relative to the U.S.dollar shown in the following chart.The exchange rate is currently $1.80 = £1.00.Which of the following is correct?

• A)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply.
• B)At an exchange rate of $1.80 = £1.00,supply for British pounds exceeds demand.
• C)Under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00.
• D)At an exchange rate of $1.80 = £1.00,demand for British pounds exceeds supply.Additionally,under a flexible exchange rate regime,the U.S.dollar will depreciate to an exchange rate of $1.90 = £1.00.

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Definitions:

Part-Time Work

Employment that does not provide the full number of hours considered standard or full-time in a given industry, typically involving fewer hours per week.

Taylorism

A management theory emphasizing efficiency, by systematically organizing tasks and breaking them down into small, simple steps.

Primary Labour Market

Involves employment sectors characterized by stable employment, higher wages, and access to benefits and career progression.

Secondary Labour Market

A segment of the job market characterized by low-paying, insecure, non-unionized, and often part-time or temporary work, frequently contrasted with more stable and better-compensated primary employment.