The Figure Given Below Depicts the Demand and Supply of Brazilian

question 111

Multiple Choice

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.Figure 22.1
In the figure:
D₁ and D₂: Demand for Brazilian reals
S₁ and S₂: Supply of Brazilian reals

-Refer to Figure 22.1. Determine the equilibrium exchange rate and equilibrium quantity of Brazilian reals, if D₁ and S₁ are the relevant demand and supply curves for Brazilian reals in this market.

• A)10 pesos per real and a quantity of 150 reals
• B)6 pesos per real and a quantity of 250 reals
• C)8 pesos per real and a quantity of 150 reals
• D)8 pesos per real and a quantity of 250 reals
• E)6 pesos per real and a quantity of 200 reals

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