Refer to the Below Graph,which Shows a Change in the Demand

question 146

Multiple Choice

Refer to the below graph,which shows a change in the demand for dollars from D to D₁.Under a system of flexible exchange rates,the

• A) exchange rate will increase to ≤0.70 per dollar.
• B) exchange rate will increase to $0.70 per pound.
• C) shortage equal to ab would be met using international monetary reserves.
• D) payment deficit will cause changes in domestic price and income levels,shifting demand to the left,supply to the right,and re-establishing the original exchange rate.
• E) price of a dollar will fall to ≤0.50.

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Definitions:

Safety Inventory

Additional stock kept in reserve to protect against variability in demand or supply chain disruptions.

Review Interval

The scheduled time between evaluations or assessments of a particular process, inventory level, or system performance.

Decentralized Locations

A distribution strategy where operations or facilities are spread out across various geographical locations instead of being centralized in one spot.

Centralized Location

A strategic location chosen for warehousing or manufacturing operations to minimize transportation costs and maximize efficiency by serving various regions from a single point.