A roll of duct tape costs 2 Canadian dollars in Canada and 3 U.S.dollars in the U.S.If the nominal exchange rate is .80 Canadian dollars per U.S.dollar.
A) A profit could be made by buying duct tape in Canada and selling it in the U.S.This would tend to drive up the price of U.S.duct tape.
B) A profit could be made by buying duct tape in Canada and selling it in the U.S.This would tend to drive up the price of Canadian duct tape.
C) A profit could be made by buying duct tape in the U.S.and selling it in Canada.This would tend to drive up the price of U.S.duct tape.
D) A profit could be made by buying duct tape in the U.S.and selling it in Canada.This would tend to drive up the price of Canadian duct tape.
Correct Answer:
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