Figure 19-3 -Refer to Figure 19-3.Which of the Following Is Not True

question 108

Multiple Choice

Figure 19-3
-Refer to Figure 19-3.Which of the following is not true?

• A)Thai imports from the United States are cheaper at exchange rates greater than $.03/baht than at the equilibrium exchange rate.
• B)The baht is overvalued at exchange rates greater than $.03/baht.
• C)To achieve an exchange rate greater than $.03/baht,the Bank of Thailand must buy surplus dollars with bahts.
• D)Thai exports to the United States are more expensive at exchange rates greater than $.03/baht than at the equilibrium exchange rate.

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Definitions:

Price Ceiling

A government-imposed limit on how high a price is charged for a product, meant to protect consumers from conditions that could make commodities prohibitively expensive.

Shortage

A market condition where the demand for a product exceeds its supply at a particular price.

Surplus

is a situation in which the quantity of a good or service available exceeds the quantity demanded at the current price.

Price Ceiling

A government-imposed limit on how high a price can be charged on a product or service, intended to protect consumers.