Canada's competitive position will:
A) strengthen when the dollar appreciates more than is warranted by PPP.
B) not be affected when the dollar appreciates more than is warranted by PPP.
C) weaken when the dollar appreciates more than is warranted by PPP.
D) weaken when the dollar depreciates more than is warranted by PPP.

Question

Quizplus · Accepted Answer

When the dollar appreciates more than is warranted by PPP, Canadian products become more expensive for foreign buyers, reducing demand and exports. This, in turn, weakens Canada's competitive position in the global market. Therefore, choice C is the best answer.

Canada's Competitive Position Will