You Are a Canadian Citizen Who Works in Toronto and Owns

question 25

Multiple Choice

You are a Canadian citizen who works in Toronto and owns a winter home in Phoenix, Arizona.When you spend the winters in Phoenix, an increase in the value of the Canadian dollar relative to the U.S.dollar should

• A)help you as each Canadian dollar of your salary is now worth more U.S.dollars.
• B)hurt you as each Canadian dollar of your salary is now worth less U.S.dollars.
• C)hurt you as it is now more expensive to live in Phoenix since the Canadian dollar appreciation.
• D)help you as it is now less expensive to live in Canada since the Canadian dollar appreciation.
• E)hurt you as each Canadian dollar of your salary is unchanged in value in U.S.dollars.

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Definitions:

Market Rate

The going rate or typical price of goods, services, or interest rates in the open market.

Theory of Profit

An economic theory that analyzes the dynamics of profit in the market economy, focusing on how profit is generated and distributed.

Entrepreneur

An individual who creates, organizes, and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Present Value

The present value of a future amount of money or series of cash flows, taking into account a particular rate of return.