How Will the Exchange Rate (Foreign Currency Per Dollar)respond to a Decrease

question 104

Multiple Choice

How will the exchange rate (foreign currency per dollar) respond to a decrease in the relative rate of productivity growth in Canada in the long run?

• A)Exchange rates will rise.
• B)Exchange rates will fall.
• C)Exchange rates will be unaffected by changes in the relative rate of productivity growth in Canada, both in the short run and in the long run.
• D)The exchange rate will be affected in the short run, but not in the long run.

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Definitions:

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