If the Bank of Canada Sets a Target Exchange Rate

question 80

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)the Bank will print more dollars for foreign distribution.
• E)the Bank should rethink its policy.

Recognize the importance of political parties in representing different groups and interests in society.

Understand the role and impact of state policies and structures on political life and society.

Examine the influence of state symbolism and national identity on political cohesiveness and support for the political system.

Assess the contributions of various theoretical perspectives to the understanding of political dynamics and power distribution in society.

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Definitions:

Marginal Product

The extra production obtained by employing an additional unit of a variable resource, while keeping the rest of the inputs unchanged.

Fixed Cost

Expenses that do not change in the short term regardless of the level of production or output.

Average Fixed Cost

The fixed costs of production (costs that don't change with the level of output) divided by the quantity of output produced.

Marginal Product

The additional output resulting from a one-unit increase in the input of a particular productive resource, holding all other inputs constant.