One Year Ago the Spot Rate of U

question 29

Multiple Choice

One year ago the spot rate of U.S. dollars for Canadian dollars was $1/C$1. Since that time the rate of inflation in the U.S. has been 4% greater than that in Canada. Based on the theory of Relative PPP, the current spot exchange rate of U.S. dollars for Canadian dollars should be approximately:

• A) $0.96/C$.
• B) $1/C$.
• C) $1.04/C$.
• D) Relative PPP provides no guide for this type of question.

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Definitions:

Purplish-Brown

Descriptive of a color that is a mix between purple and brown, often used to describe bruises or certain skin conditions.

KUB

an acronym for Kidneys, Ureters, Bladder, referring to a radiographic examination of these abdominal areas without the use of contrast material.

HD

An abbreviation often used for High Definition, a standard for video and image clarity characterized by a high resolution.

Meaning

The significance or interpretation of something, such as a word, phrase, or concept.