In Determining the Exchange Rate Between the Canadian Dollar and British

question 104

Multiple Choice

In determining the exchange rate between the Canadian dollar and British pound, if Canadian income increases, then

• A)the demand for pounds will increase, leading to depreciation of the Canadian dollar, assuming exchange rates are allowed to float
• B)the demand for pounds will increase, leading to depreciation of the Canadian dollar, assuming exchange rates are fixed
• C)the demand for pounds will increase, leading to appreciation of the Canadian dollar, assuming exchange rates are allowed to float
• D)the demand for pounds will increase, leading to appreciation of the Canadian dollar, assuming exchange rates are fixed
• E)the supply of pounds will shift to the left, causing appreciation of the Canadian dollar, assuming exchange rates are fixed

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Definitions:

Interest Expense

The expenses a company faces for borrowing money, usually shown on the income statement.

Discount On Notes Payable

This refers to the difference between the face value of a note payable and the amount received by the issuer, representing extra cost to be amortized over the term of the note.

Non-Interest-Bearing Note

A promissory note that does not accrue interest over its lifetime, typically requiring the borrower to repay only the principal amount.

Actuarial Information

Data and analysis related to the calculation of insurance risks and premiums, often based on statistical methods.