In the Market for Foreign-Currency Exchange in the Open-Economy Macroeconomic

question 179

Multiple Choice

In the market for foreign-currency exchange in the open-economy macroeconomic model, which of the following results from a higher real exchange rate?

• A) It makes Canadian goods more expensive relative to foreign goods and reduces the quantity of dollars supplied.
• B) It makes Canadian goods more expensive relative to foreign goods and reduces the quantity of dollars demanded.
• C) It makes foreign goods more expensive relative to Canadian goods and reduces the quantity of dollars supplied.
• D) It makes foreign goods more expensive relative to Canadian goods and reduces the quantity of dollars demanded.

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Definitions:

Over the Counter

Describes securities trading through a dealer network rather than on a centralized exchange, often for stocks that do not meet the requirements to be listed on major exchanges.

1934 Act

Refers to the Securities Exchange Act of 1934, which governs the trading of securities in the U.S., including the establishment of the SEC.

Registration Under

The process of officially recording or enlisting something or someone under certain conditions or regulations, often related to securities laws.

1933 Act

A U.S. federal law, officially known as the Securities Act of 1933, enacted to ensure more transparency in financial statements to protect investors from fraud.