Suppose That the Demand for Euros in the Foreign Exchange

question 95

Multiple Choice

Suppose that the demand for euros in the foreign exchange market equals 11,000 - 1,000e and the supply of euros in the foreign exchange market equals 8,000 + 1,000e,where e is the nominal exchange rate expressed in dollars per euro.The market equilibrium value of the euro is _________ euros per dollar or ___ dollars per euro.

• A) 2,000;0.0005
• B) 0.67;1.5
• C) 0.04;25
• D) 0.2;5
• E) 5;0.2

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