MKT-5.C—Define (using graphs as appropriate) the equilibrium exchange rate

Define (using graphs as appropriate) the equilibrium exchange rate.

• In the foreign exchange market, equilibrium is achieved when the exchange rate is such that the quantities demanded and supplied of the currency are equal.
• Enduring understanding MKT-5: The interaction of buyers and sellers exchanging the currency of one country for the currency of another determines the equilibrium exchange rate in a flexible exchange market and influences the flow of goods, services, and financial capital between countries.