If the Bank of Canada Sets a Target Exchange Rate

question 5

Multiple Choice

If the Bank of Canada sets a target exchange rate that is higher than the current exchange rate,then

• A)the Bank must sell dollars.
• B)the Bank must buy dollars.
• C)the Bank can do nothing in the short run.
• D)will print more dollars for foreign distribution.
• E)None of the above.

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Definitions:

Retina

A layer of cells at the back of the eye, sensitive to light, which triggers nerve impulses that pass via the optic nerve to the brain, where a visual image is formed.

Electromagnetic Energy

A form of energy that is reflected or emitted from objects in the form of electrical and magnetic waves that can travel through space.

Neural Impulses

Electrical signals transmitted along the neurons, facilitating communication between the brain and other parts of the body.

Sclera

The white outer layer of the eyeball, serving as protection and providing attachment for the ocular muscles.