Suppose That Canada Decides to Peg Its Dollar ($C, or the Loonie)

question 141

Multiple Choice

Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What will happen to the Canadian IS curve as a result of the leftward shift of the U.S. IS curve?

• A) It will shift rightward.
• B) It will shift leftward.
• C) It will not change.
• D) The IS curve will show an increase.

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Title Document

Legal paperwork that proves ownership of a particular asset, such as real estate or a vehicle.

Special Import Measures Act

Legislation aimed at providing protection to Canadian industries against unfair trade practices such as dumping and subsidization by foreign companies.

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