Multiple Choice
Suppose that the exchange rate is 10 Moroccan dirhams per Canadian dollar.Also suppose that you can buy a crate of oranges for 300 dirhams in the Moroccan capital of Rabat and can buy a similar crate of oranges in Ottawa for $35.Which of the following is consistent with these facts?
A) The real exchange rate is greater than one, and arbitrageurs could profit by buying oranges in Canada and selling them in Morocco.
B) The real exchange rate is greater than one, and arbitrageurs could profit by buying oranges in Morocco and selling them in Canada.
C) The real exchange rate is less than one, and arbitrageurs could profit by buying oranges in Canada and selling them in Morocco.
D) The real exchange rate is less than one, and arbitrageurs could profit by buying oranges in Morocco and selling them in Canada.
Correct Answer:
Verified
Correct Answer:
Verified
Q14: Which of the following best describes net
Q23: Which of the following would be Canadian
Q27: What imbalance does net capital outflow measure?<br>A)an
Q28: Suppose Paul,a Romanian citizen,builds a telescope factory
Q65: What equation is the GDP identity in
Q95: Net capital outflow is the purchase of
Q109: A Japanese firm buys lumber from Canada
Q114: Under what circumstances does purchasing-power parity explain
Q129: Suppose a bottle of wine costs 25
Q132: Which of the following best describes the