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 21.1 
In the figure:
D1 and D2: Demand for Brazilian reals
S1 and S2: Supply of Brazilian reals
Refer to Figure 21.1.The demand curves shown for Brazilian reals are based on:
Definitions:
Numerical
Pertaining to numbers, often used to describe data or methods that involve the manipulation or analysis of numbers.
Sample Space
The collection of every potential result that can occur from a statistical experiment.
Event
An outcome or set of outcomes within a sample space; something that can occur in an experiment.
Conditional Probability
The likelihood that one event happens assuming a different event has already taken place.
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