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 36.1 
In the figure:
D1 and D2: Demand for Brazilian reals
S1 and S2: Supply of Brazilian reals
Refer to Figure 36.1.The supply curves shown for Brazilian reals are based on:
A) the supply of Brazilian goods in the international market.
B) the Brazilian demand for Mexican products.
C) the supply of Mexican pesos in the market.
D) the Brazilian demand for Brazilian products.
E) the Mexican demand for Brazilian products.
Correct Answer:
Verified
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