Suppose the Bank of Canada Follows a Fixed-Exchange Rate of 0.50

question 30

Multiple Choice

Suppose the Bank of Canada follows a fixed-exchange rate of 0.50 U.K. pounds per Canadian dollar. If the demand for dollars temporarily decreases, to maintain the target exchange rate, the Bank can

• A)sell dollars.
• B)buy dollars.
• C)increase Canadian exports.
• D)increase Canadian imports.
• E)violate purchasing power parity.

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Definitions:

Temperament

The aspect of an individual’s personality concerning their natural predispositions towards emotional reactions and behaviors.

Working Self-Concept

The part of one's self-identity that is active and relevant in the current context or social situation.

Emotionality

The quality or state of being emotional; the extent to which a person's behavior is governed by emotions or emotional responses.

Aspect of Temperament

Fundamental personality traits or characteristics that are biologically based and observable from an early age, influencing behavior and emotional reactions.