An exchange rate of US$1 to 0.556 Canadian dollars represents

Question

Quizplus · Accepted Answer

Option A is correct as the exchange rate quote is in terms of the Canadian dollar and not the US dollar. Therefore, holders of US dollars must convert their currency to Canadian dollars to make use of this exchange rate.

Option B is also correct as Canadian exports become cheaper in the US due to the exchange rate, thus making it easier for Canadian businesses to sell more products in the US.

Therefore, the best choice is D as both options A and B are correct.

An Exchange Rate of US$1 to 0