If Prices in the United States Rise Less Rapidly Than

question 104

Multiple Choice

If prices in the United States rise less rapidly than in Canada, which one of the following would be expected according to purchasing power parity?

• A) The value of the Canadian dollar will decline, relative to the U.S. dollar.
• B) The value of the U.S. dollar will decline, relative to the Canadian dollar.
• C) Inflation in the U.S. will exceed inflation in Canada.
• D)The exchange rate will be unaffected by the price changes.

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Definitions:

Divisible Contract

A contract that includes multiple agreements or parts, which can be separated so that the failure to perform one part does not necessarily breach the entire contract.

Implied-In-Fact Condition

A legal concept where the obligations or conditions of a contract are not explicitly stated but can be inferred from the nature of the agreement and the actions of the parties involved.

Express Condition

A provision in a contract that must be met as a prerequisite for performance or fulfillment of the contract terms.

Anticipatory Repudiated

Anticipatory Repudiation occurs when one party to a contract indicates they will not fulfill their contractual obligations before they are due to perform.