Figure 32-2
-Refer to Figure 32-2.At what real exchange rate is the quantity of dollars demanded equal to 500?
A)1
B).8
C).6
D)None of the above are correct.

Question

Figure 32-2 
-Refer to Figure 32-2.At what real exchange rate is the quantity of dollars demanded equal to 500?
A)1 
B).8 
C).6 
D)None of the above are correct.

Quizplus · Accepted Answer

At a real exchange rate of .6, the quantity of dollars demanded is equal to 500. This can be seen by tracing the vertical line from 500 on the y-axis until it intersects with the curve representing the real exchange rate of .6, and then following the horizontal line until it intersects with the x-axis, giving us an exchange rate of .6. Therefore, the correct answer is choice C.

Figure 32-2 -Refer to Figure 32-2.At What Real Exchange Rate Is the Rate