In Order to Encourage Canadians to Avoid Cross Border Shopping

question 194

Multiple Choice

In order to encourage Canadians to avoid cross border shopping, Walmart Canada is striving to keep the price of electronics in Canada equivalent to the price of electronics in its US stores before taxes. If a TV is sold for $700 in US stores, what should be the sale price of the same TV in Canadian stores? Use the exchange rate of US$0.966 per C$.

• A) $700
• B) $724.64
• C) $676.20
• D) $641.27
• E) $619.47

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Definitions:

European Union

A political and economic union of 27 European countries that are located primarily in Europe, aiming to ensure the free movement of people, goods, services, and capital among its members.

Agricultural Imports

Goods brought into a nation that are produced by the agriculture sector of another country.

Government Price Supports

Economic policies or subsidies implemented by the government to maintain the market price of a commodity or product above its equilibrium level.

Surplus Production

The condition where the quantity of goods produced exceeds the quantity of goods consumed.