The table given below reports the inflation rate in the U.S. and Canada for two years.
Table 8.1
-Refer to Table 8.1. Assume that the exchange rate is fixed at 1.4 CAD = $1 and that price changes for salmon are identical to the inflation rate in each country. If U.S. importers pay 10,000 CAD for a trailer of Canadian salmon in year 1, what is the approximate price of that salmon in year 2, given that exchange rates do not change?
A) $10,360
B) $14,504
C) $7,400
D) $7,143
E) $10,000
Correct Answer:
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