Multiple Choice
Suppose purchasing power parity (PPP) depends only on hamburgers. The exchange rate is C$1.00 = US$0.80 and hamburger prices are C$2.00 in Canada and US$1.80 in the U.S. PPP suggests that the
A) demand for Canadian dollars will decrease.
B) Canadian dollar is overvalued.
C) Canadian dollar is undervalued.
D) supply of Canadian dollars will increase.
E) supply of U.S. dollars will increase.
Correct Answer:
Verified
Correct Answer:
Verified
Q74: When Canadian GDP increases, the growth effect
Q75: The economic force that causes opposite effects
Q76: In the foreign exchange market, the demand
Q77: The Canadian dollar depreciates if<br>A) Canadian interest
Q78: A stronger Canadian dollar hurts<br>A) importers.<br>B) exporters.<br>C)
Q80: Suppose purchasing power parity (PPP) depends only
Q81: Canadian exports are positive numbers on Canada's
Q82: Changes in world prices for Canadian resource
Q83: If the rate of return is 3
Q84: The main items on the<br>A) current account