Information for questions 18-20 A certain country has curren…
Questions
Infоrmаtiоn fоr questions 18-20 A certаin country hаs currency called the kroon (symbol Kr). This country tries to keep a fixed exchange rate with the dollar, at 12 $/ Kr. The figure represents the daily supply and demand for the kroon. The numbers on the horizontal axis are in billions of kroons, but ignore that this is in “billions” part, that is, just treat the numbers as whole numbers in kroons. For numeric questions, only the exact answer is accepted, so double check that you are reading the graph correctly. All graphical answers can be made exact with the assumptions: if two curves seem to cross where two grid lines also cross, then they do; if they intersect a grid line at midpoint, then it’s exactly in the middle. Thus, S and D cross exactly at 10, and when the supply of kroon is 300, the supply price is exactly 6.5 $/Kr. According to the figure, how many kroon must this country’s central bank buy or sell daily, in order to sustain the fixed exchange rate? Enter a positive number if you think it must buy kroon and a negative number if you think it must sell kroon (thus, if the answer is “it buys 300 kroon daily”, enter 300, if the answer is “it sells 250 kroon daily” enter -250). Enter 0 if you think the central bank doesn’t need to either buy or sell kroon.
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