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PRINT HELP Lab 9 (Question 2) Name: kevin xu Date: 2017-04-09 16:15 Question 2 [8 points] Complete the following. a) Complete the following statement. b) Complete the following statement. Marking: a) ...our C$ appreciate , our exports ... The answer should be 'depreciate', but you have not selected this. You will lose 1 mark for this part. When exchange rates are flexible an interest rate cut and the associated drop in demand for the loonie does not affect the money supply since the currency remains in circulation. Thus the exchange rate becomes favourable for exports and our economy and GDP grow. b) ...pressure for C$ to does not change . BOC has to sell... The answer should be 'depreciate', but you have not selected this. You will lose 1 mark for this part. ...Ultimately there is a recessionary effect on the... The answer should be 'a negligible', but you have not selected this. You will lose 1 mark for this part. When exchange rates are fixed an interest rate cut and the associated drop in demand force the central bank to buy up currency and decrease the money supply. Interest rates independently self correct and the economy experiences
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