Refer to Figure 20.5 for the Following Questions

question 161

Multiple Choice

Refer to Figure 20.5 for the following questions.
Figure 20.5
-If the government of Thailand wants to peg the baht to the US dollar at a value below 0.03 baht per US dollar,as seen in Figure 20.5,then

• A) the baht will be overvalued.
• B) the supply of baht for US dollars will be greater than the demand of baht for US dollars.
• C) there will be a shortage of baht.
• D) the par exchange rate will be set above the equilibrium exchange rate.

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