Use the graph to answer the following questions.

a. According to the graph, is there a surplus or a shortage of baht in exchange for U.S. dollars? Briefly explain.
b. To maintain the pegged exchange rate, will the Thai central bank need to buy baht in exchange for dollars or sell baht in exchange for dollars? How many baht will the Thai central bank need to buy or sell?

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Exchange rate (S/baht) $0.03 0.02 Pegged exchange rate 70 100 120 Quantity of baht traded per day (in millions)