[Solved] If a Country Has a Fixed Exchange Rate

What effect does a depreciation of the dollar have on real GDP in Canada in the short run? A)Real GDP will fall. B)Real GDP will rise. C)Real GDP will be unaffected by the depreciation of the dollar. D)Real GDP will be unchanged, but nominal GDP will rise. E)Real GDP will fall, but nominal GDP will rise.

The Japanese recession of 2007-2009 decreased the demand for imports in Japan, which caused the ________ curve for the yen to shift ________, increasing the exchange rate and the value of the yen. A)supply; right B)supply; left C)demand; right D)demand; left

An appreciating yen makes Japanese products A)more expensive in foreign markets. B)less expensive in foreign markets. C)more expensive in the Japanese market. D)more expensive in both foreign markets and the Japanese market. E)more popular outside Japan.

Which of the groups below would benefit from a fall in the value of the Canadian dollar? A)Canadian consumers of imports. B)Canadian firms selling to other countries. C)Canadian firms with operations in other countries. D)Canadian firms that have borrowed from savers in other countries. E)Canadian families planning foreign vacations.

Which of the groups below would benefit from a "strong" Canadian dollar? A)Canadian consumers of imports. B)Canadian firms selling to other countries. C)Foreign companies with operations in Canada. D)Canadians who hold foreign assets. E)Canadian firms offering tours to foreign tourists.

When exchange rates are not determined in the market but are instead set by a country's central bank, we say that the country's exchange rate is A)flexible. B)fixed. C)a nominal exchange rate. D)a real exchange rate. E)non-convertible.

If the price level in Canada is 110, the price level is 120 in Mexico, and the nominal exchange rate is 140 pesos per dollar, what is the real exchange rate from the Canadian perspective? A)94 B)115 C)128 D)141 E)153

Assume Canada is the "domestic" country and China is the "foreign" country.Which of the following might increase the real exchange rate between Canada and China? A)an appreciation of the yuan B)a depreciation of the dollar C)an increase in the price level in Canada D)an increase in the price level of China

Assuming Canada is the "domestic" country, if the real exchange rate between Canada and France increases from 1.5 to 1.8 A)the prices of Canadian goods and services have increased by 53% relative to France. B)the prices of Canadian goods and services have increased by 3% relative to France. C)the prices of Canadian goods and services have decreased by 16% relative to France. D)the prices of Canadian goods and services have increased by 20% relative to France. E)the prices of Canadian goods and services have decreased by 53% relative to France.

In 2016 Venezuela was expected to experience inflation of up to 700%. Given that central bank loss of independence tends to lead to inflation, we should expect this event to cause inflation to ________ and the real exchange rate to ________ between the two counties.(Assume the nominal exchange does not change, and that Canada is the "domestic" country). A)rise in Venezuela relative to Canada; fall B)fall in Venezuela relative to Canada; fall C)rise in Venezuela relative to Canada; rise D)fall in Venezuela relative to Canada; rise E)fall in Venezuela relative to Canada; remain unchanged