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The Figure Given Below Depicts the Demand and Supply of Brazilian

question 45

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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 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: D<sub>1</sub> and D<sub>2</sub>: Demand for Brazilian reals S<sub>1</sub> and S<sub>2</sub>: Supply of Brazilian reals Refer to Figure 22.1.If the initial equilibrium exchange rate is 6 pesos per real, then other things equal, a decrease in the number of Brazilian tourists to Mexico would: A) increase the demand for Brazilian reals from D<sub>2</sub> to D<sub>1</sub> and increase the exchange rate to 8 pesos per real. B) decrease the supply of Brazilian reals from S<sub>1</sub> to S<sub>2</sub> and increase the exchange rate to 8 pesos per real. C) decrease the supply of Brazilian reals from S<sub>1</sub> to S<sub>2</sub> and increase the exchange rate to 10 pesos per real. D) decrease the demand for Brazilian reals from D<sub>1</sub> to D<sub>2</sub> and increase the exchange rate to 8 pesos per real. E) decrease the supply of Brazilian reals from S<sub>1</sub> to S<sub>2</sub> and increase the demand for Brazilian reals from D<sub>2</sub> to D<sub>1</sub>, thereby changing the exchanging rate to 10 pesos per real. In the figure:
D1 and D2: Demand for Brazilian reals
S1 and S2: Supply of Brazilian reals
Refer to Figure 22.1.If the initial equilibrium exchange rate is 6 pesos per real, then other things equal, a decrease in the number of Brazilian tourists to Mexico would:

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