The Following Diagrams of Budget Constraints Pertain to the Next

question 10

Multiple Choice

The following diagrams of budget constraints pertain to the next three questions. The vertical axis is Income and the horizontal axis is Leisure.

-Which of the diagrams of budget constraints above depicts the Wage Subsidy program?

• A) a
• B) b
• C) c
• D) d

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Definitions:

Interest Rate Parity

A financial theory stating that the difference in interest rates between two countries is equal to the difference between the forward and spot exchange rates of their currencies.

Nominal Risk-Free

The rate of return on an investment with no risk of financial loss, not adjusted for inflation.

Export Development Canada

A Canadian government agency that provides financing, insurance, and bonding services to Canadian exporters and investors.

Canadian Exports

Goods or services sold by Canada to other countries.