If Foreign Holdings of Canadian Dollars Increase, Holding All Else

question 225

Multiple Choice

If foreign holdings of Canadian dollars increase, holding all else constant,

• A)the balance on the Canadian financial account will increase.
• B)the balance on the Canadian current account will increase.
• C)the balance on the Canadian capital account will increase.
• D)the Canadian balance of trade will increase.
• E)the value of the Canadian dollar will decrease.

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding costs directly related to production.

Differential Income

The difference in income between two alternative business decisions, used in assessing the financial viability of each option.

Special Stitching

Unique or customized sewing techniques used to enhance the design or functionality of a textile product.

Variable Cost

An expense that changes in direct proportion to the activity level or volume of production in a business.