Refer to Figure 15.1 for the Following Questions

Multiple Choice

Refer to Figure 15.1 for the following questions.
Figure 15.1

-Suppose the graph in Figure 15.1 represents the market for the British pound under the Bretton Woods System. If the par exchange rate was set at 4 United States dollars:

A) a shortage of pounds will exist.
B) the British central bank will have to buy pounds with US dollars.
C) the pound will be undervalued versus the US dollar.
D) the demand for pounds will be greater than the supply.