Suppose That the Demand for Euros in the Foreign Exchange

question 202

Multiple Choice

Suppose that the demand for euros in the foreign exchange market equals 8,000 - 2,000e and the supply of euros in the foreign exchange market equals 4,500 + 3,000e,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;0.8
• B) 0.5;2
• C) 1.428;0.7
• D) 2.2;45
• E) 45;2.2

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