The Figure Given Below Depicts the Foreign Exchange Market for British

question 15

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S.dollars. Figure 21.2 Refer to Figure 21.2.At the initial equilibrium point, with demand curve D and supply curve S₁:

• A)the price of dollar per British pound is $1.50 and the quantity of British pounds being traded is 225.
• B)the price of dollar per British pound is $1.60 and the quantity of British pounds being traded is 225.
• C)the price of dollar per British pound is $1.60 and the quantity of British pounds being traded is 300.
• D)the price of dollar per British pound is $1.75 and the quantity of British pounds being traded is 350.
• E)the price of dollar per British pound is $1.75 and the quantity of British pounds being traded is 300.

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Definitions:

Price

The amount of money expected, required, or given in payment for a good or service.

Discounts

A reduction applied to the regular price of goods or services, typically used as a strategy to increase consumer demand or clear out excess inventory.

Allowances

Financial discounts or concessions granted to customers, employees, or other parties, often as incentives or for compensation for specific purposes.

Product

An item or service that is developed, manufactured, or offered for sale to meet consumer needs or desires.