If the Real Exchange Rate Between Canada and Japan Remains

question 90

Multiple Choice

If the real exchange rate between Canada and Japan remains unchanged, and the inflation rate in Canada is 6 percent and the inflation rate in Japan is 3 percent, the:

• A)dollar will appreciate by 3 percent against the yen.
• B)yen will appreciate by 3 percent against the dollar.
• C)yen will appreciate by 6 percent against the dollar.
• D)yen will appreciate by 9 percent against the dollar.

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Definitions:

Sphenoid

A complex bone at the base of the skull that helps form the eye socket, nose, and base of the brain casing.

Maxilla

One of a pair of bones forming the upper jaw, holding the upper teeth, and contributing to the formation of the orbit, nasal cavity, and palate.

Vertebral Column

The spine or backbone; a column of vertebrae in the back that protects the spinal cord and supports the body.

Lumbar

Refers to the lower part of the spine between the thoracic region and the sacrum.