Suppose Canada Has a Flexible Exchange Rate

question 73

Multiple Choice

Suppose Canada has a flexible exchange rate.If there is a rise in the world price of copper (a major Canadian export) ,other exporting sectors of the Canadian economy will likely ________ due to the resulting ________ of the Canadian dollar.

• A)contract; depreciation
• B)contract; appreciation
• C)expand; depreciation
• D)expand; appreciation
• E)expand; reduced speculative appeal

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