The Figure Given Below Depicts the Demand and Supply of Brazilian

question 95

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 36.1 In the figure:
D₁ and D₂: Demand for Brazilian reals
S₁ and S₂: Supply of Brazilian reals
Refer to Figure 36.1.The demand curves shown for Brazilian reals are based on:

• A)the supply of Brazilian reals in the market.
• B)the demand for Mexican pesos.
• C)Brazilian demand for Brazilian products.
• D)Brazilian demand for Mexican products.
• E)Mexican demand for Brazilian products.

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