Question: From the following figure, determine (a) The equilibrium exchange rate between the dollar and the pound sterling and the equilibrium quantity of pounds with supply

From the following figure, determine
(a) The equilibrium exchange rate between the dollar and the pound sterling and the equilibrium quantity of pounds with supply curve S£ and S′£ under a flexible exchange rate system.
(b) If the United States wanted to maintain the exchange rate at $3 = £1 with supply curve S£, how much pound reserves would the U.S. central bank gain or lose per day?

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