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When in 1985 a British Pound Cost Approximately C$1

Question 89

Multiple Choice

When in 1985 a British pound cost approximately C$1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker Canadian dollar, the same Shetland sweater would have cost ________.


A) less than $130
B) more than $130
C) $130, since the exchange rate does not affect the prices that Canadian consumers pay for foreign goods
D) $130, since the demand for Shetland sweaters will decrease to prevent an increase in price due to the stronger dollar

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