Refer to the Diagram Below Where D and S Are

question 12

Multiple Choice

Refer to the diagram below where D and S are Canada's demand for and supply of pesos. At the equilibrium exchange rate, E, Canada's balance of payments is in equilibrium. Under a system of flexible exchange rates, the shift in demand from D₁ to D₂ will:

• A) ultimately cause Canadian exports to decline and its imports to rise.
• B) cause the dollar price of pesos to increase.
• C) cause the peso to depreciate.
• D) cause the dollar to depreciate.

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Definitions:

Breadwinner

Traditionally, the person within a household who earns the primary source of income to support the family's financial needs.

Stay-At-Home Mom

Describes a mother who opts to stay at home to raise her children and manage household duties rather than pursuing employment outside the home.

Instrumental

Serving as a means to an end or being useful in achieving a goal, often used in the context of roles, actions, or objects.

Expressive

Related to the expression of thoughts, feelings, and behaviors, often in contrast to instrumental actions aimed at achieving a specific goal.