Suppose That Canada Pegs Its Dollar to the U

question 174

Multiple Choice

Suppose that Canada pegs its dollar to the U.S. dollar at a rate of $C1 = $US1 and that Canada is a major exporter of crude oil to the United States. The increase in the price of oil that occurred in the second half of 2007 is likely to:

• A) cause asymmetric shocks to the U.S. and Canadian economies that will make it difficult for Canada to maintain the $C1 = $US1 exchange rate.
• B) cause symmetric shocks to the U.S. and Canadian economies that will make it difficult for Canada to maintain the $C1 = $US1 exchange rate.
• C) cause asymmetric shocks to the U.S. and Canadian economies and make it easier for Canada to maintain the $C1 = $US1 exchange rate.
• D) cause symmetric shocks to the U.S. and Canadian economies and make it difficult for Canada to maintain the $C1 = $US1 exchange rate.

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Definitions:

Growth Hormones

Hormones that stimulate growth, cell reproduction, and cell regeneration in humans and other animals.

Total Sleep Time

The overall duration of sleep, including all stages of sleep, within a specific period, typically measured over one night.

Advancing Age

The process of growing older, typically associated with physical, cognitive, and social changes.

Delta Wave

A type of high amplitude brain wave seen in the deepest stages of sleep, associated with restorative sleep.