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Foreign Exchange Rate · Question 15 of 50

The graph shows the demand for and supply of dollars.

Question 15

MediumOriginal question

The graph shows the demand for and supply of dollars. What is the equilibrium exchange rate?

A downward-sloping demand curve for dollars (D$) and an upward-sloping supply curve of dollars (S$). They cross at E, where the exchange rate is ₹80 per dollar and $40 billion is traded.
Options for question 15

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. Equilibrium is where D$ meets S$, at E.

  2. E is at ₹80 per dollar, with $40 billion traded.

Worth noting

40 is the quantity of dollars traded, in billions, not the rate.

Concept
Equilibrium exchange rate
Typical time
70 s
Your time
—
The rule this testsDemand for and supply of foreign exchange
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Ten questions from Foreign Exchange Rate, at your own pace.

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