| In the diagram below, at exchange rate \[O{{P}_{1}}\], there is |
 |
A) Excess demand
B) Excess supply
C) Equilibrium
D) Either [a] or [b]
Correct Answer: B
Solution :
At exchange rate \[O{{P}_{1}}\] there is more supply of foreign currency than demand, this represents the situation of excess supply.
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