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

question 78

Multiple Choice

Consider the supply-demand framework for the British pound relative to the U.S. dollar shown in the nearby 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)a and c are correct

---

Definitions:

National Law

The legal rules that apply across an entire nation, forming the country's legal system as distinguished from regional or local laws.

Fundamental Law

A term that generally refers to laws or legal principles that are foundational or essential to the governing of a society, often embodied in a constitution.

State Legislatures

The legislative bodies in each of the United States, responsible for making state laws.

Judicial Authority

The power vested in courts and judges to interpret laws, adjudicate disputes, and enforce legal decisions.