In a Competitive Foreign-Exchange Market Between the Canadian Dollar and the British

question 58

Multiple Choice

In a competitive foreign-exchange market between the Canadian dollar and the British pound,a price of pounds (in terms of dollars) above the free-market equilibrium would

• A)result in the quantity of pounds demanded being greater than the quantity supplied.
• B)indicate that some people who wish to purchase pounds will not be able to do so at the current exchange rate.
• C)lead to an appreciation of the dollar.
• D)result in the quantity of dollars supplied being greater than the quantity demanded.
• E)lead to a depreciation of the dollar.

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Definitions:

Pro-Union Majority

A predominance of individuals or political entities that support the maintenance and unity of a federated state or union, especially relevant in the context of the Civil War in the United States.

Severe Inflation

An extreme rate of inflation, causing a rapid and uncontrollable increase in prices, significantly eroding purchasing power.

Food Shortages

Situations in which the supply of essential food commodities is insufficient to meet the demand, often resulting in hunger and malnutrition.

War Revenue

Refers to funds raised to finance a situation of armed conflict, typically through taxation or the issuance of war bonds.