ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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State whether the following is true or false.In the exchange rate £1 = US$1.8865-1.8893, $1.8893 is the bid rate of sterling.
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False
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True
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -(b) The foreign exchange rate is determined by the demand and supply.
Detailed explanation-2: -Answer. Answer: The equilibrium exchange rate determined in the foreign exchange market is determined by the flexible rate of exchange.
Detailed explanation-3: -If the exchange rate is pegged at $2.50 per pound: the pound will be overvalued.
There is 1 question to complete.