Suppose that $1 U.S. costs $1.50 Canadian. If in St. Louis a CD costs $10 U.S. and in Montreal it costs $15 Canadian, then__________ .
A) Americans will buy CDs in Montreal
B) Canadians will buy CDs in St. Louis
C) purchasing power parity exists
D) Virgin Records will have an incentive to build more stores in North America
Correct Answer:
Verified
Q209: Initially the nominal exchange rate between the
Q210: Suppose the Fed wants to fix the
Q211: Given the U.S. price level P, the
Q212: The Fed_ intervene in the foreign exchange
Q213: In the long run, the nominal exchange
Q215: The real exchange rate is the
A) relative
Q216: _can intervene directly in the foreign exchange
Q217: The nominal exchange rate is
A) the relative
Q218: The Federal Reserve can influence the exchange
Q219: A decrease in the expected future exchange
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