FIGURE 34-2 Refer to Figure 34-2

question 5

Multiple Choice

FIGURE 34-2 Refer to Figure 34-2.If the exchange rate is e₁,there is

• A)an excess demand for foreign exchange.
• B)pressure for the Canadian dollar to depreciate.
• C)pressure for the exchange rate to rise.
• D)an excess supply of foreign exchange.
• E)a surplus of Canadian dollars.

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Definitions:

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to analyze the effect of one variable on another while holding everything else constant.

Variables

Elements, features, or factors that are likely to vary or change.

Economists

Professionals who study how societies use available resources to produce valuable commodities and distribute them among different people.

Normative Statement

Describes expressions of what ought to be rather than what is, often reflecting opinions or prescriptions for policy rather than objective statements.