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Suppose There Is a Rise in the World Price of Canada's

Question 4

Multiple Choice

Suppose there is a rise in the world price of Canada's imports.If the Canadian demand for imports has a price elasticity greater than 1 (elastic) ,the demand for foreign exchange will ________ and the Canadian dollar will ________.


A) rise; appreciate
B) rise; depreciate
C) fall; appreciate
D) fall; depreciate
E) fall; and remain constant

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