If, in Retaliation for "Unfair" Trade Practices, the Canadian Government

question 44

Multiple Choice

If, in retaliation for "unfair" trade practices, the Canadian government imposes a 30 percent tariff on Japanese DVD recorders, but at the same time, Canadian demand for Japanese goods increases, then, in the long run, ________, everything else held constant.

• A)the Japanese yen should appreciate relative to the Canadian dollar
• B)the Japanese yen should depreciate relative to the Canadian dollar
• C)there is no effect on the Japanese yen relative to the Canadian dollar
• D)the Japanese yen could appreciate, depreciate or remain constant relative to the Canadian dollar

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