If There Is a Surplus of Canadian Dollars on the Foreign

question 13

Multiple Choice

If there is a surplus of Canadian dollars on the foreign exchange market,which of the following statements is true?

• A)The Canadian dollar is over-valued.
• B)The Canadian dollar is under-valued.
• C)Canada must be on a flexible exchange rate system.
• D)Demand for the currency could have recently fallen.
• E)a)and d).

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Definitions:

Predatory Pricing

A competitive strategy where a company sets very low prices for its products or services with the intent to drive competitors out of the market.

Break-even Analysis

A calculation that determines when a business or project will be able to cover all its expenses and begin to make a profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain scale, such as rent, salaries, and insurance.

Variable Costs

are expenses that change in proportion to the activity of a business, such as sales volumes, including costs of goods sold and direct labor costs.