Suppose That the Following Situation Exists in the Foreign Exchange

question 7

Multiple Choice

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys $1.01 U.S, and 1 Canadian dollar buys 6.63 South African rand. How many U.S. dollars will one rand buy?

• A)$6.56
• B)$1.01
• C)$0.17
• D)$0.15
• E)$6.63

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Definitions:

Short Run

Short Run is a time period in economics during which at least one input is fixed while others are variable.

Fixed Input

A factor of production that cannot be easily increased or decreased in the short term, such as land or machinery.

Short Run

A period in which at least one input in the production process is fixed, limiting the ability of the firm to adjust production levels.

Variable Costs

Outlays that shift in tandem with the quantity of goods produced.