If the GDP Deflator in Canada Is 114, and the GDP

question 188

Multiple Choice

If the GDP deflator in Canada is 114, and the GDP deflator in Ukraine is 142, which of the following changes would the theory of purchasing power parity predict? (The Ukrainian currency is the hryvnia.)

• A)The demand for the dollar will rise since the dollar is undervalued.
• B)The demand for the dollar will fall since the dollar is overvalued.
• C)The supply of the dollar will fall since the dollar is undervalued.
• D)The demand and supply of dollars will remain the same as the dollar is correctly valued.
• E)No prediction regarding changes in the demand or supply of the dollar can be made without information on the exchange rate between the Canada and Ukraine.

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Definitions:

Constructive Trust

An equitable remedy resembling a trust, imposed by a court in order to benefit a party that has been unjustly enriched at another's expense, even though no actual trust has been created by the parties.

Legal Title

The formal right of ownership of property, recognized and protected by law, which may not necessarily entail the possession or use of the property.

Resulting Trust

A trust law concept that arises when one person holds the title to property under circumstances suggesting that he or she should not enjoy the full beneficial interest in the property.

Living Trust

A legal document that allows an individual to control their assets during their lifetime and distribute the remaining assets after death without the need for probate.