If the Canadian Nominal Exchange Rate Does Not Change,but Prices

question 63

Multiple Choice

If the Canadian nominal exchange rate does not change,but prices rise faster abroad than in Canada,then the Canadian real exchange rate

• A)does not change.
• B)rises.
• C)declines.
• D)None of the above is necessarily correct.

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Definitions:

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Large-Sample Z

A statistical method used for hypothesis testing and confidence interval estimation, appropriate when the sample size is large, typically using the Z-distribution.

Plus Four Estimate

A technique in statistics, particularly in bootstrap methodology, to produce a more robust estimate by adding four observations - two at each end of the sample data.

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