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S p e g g e d = USD 1 USD 0 . BSD a . The pegged rate of USD 1 . 0 0

Spegged=USD1
USD 0.
BSD
a. The pegged rate of USD 1.00BSD, undervalues the BSD as compared to the free-floating equilibrium rate
b. At the pegged rate of USD 1.00/BSD, there is excess private sector demand for the Bahamian dollar
c. At the pegged rate of USD 1.00/BSD, there is excess private sector supply for the Bahamian dollar
d. To maintain the pegged rate, the Central Bank of the Bahamas would have to demand BSD from the foreign exchange market (buy BSD and sell USD)
e.c and d
f. a and b
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