27. An increase in Canadian interest rates would cause a decrease in aggregate demand by: A) increasing investment, appreciating the Canadian dollar, and increasing imports.B) decreasing investment, appreciating the Canadian dollar, and increasing imports.C) increasing investment, depreciating the Canadian dollar, and increasing exports.D) decreasing investment, depreciating the Canadian dollar, and decreasing exports. 28. According to the accelerator principle: 29. Holding everything else constant, if the Canadian dollar falls against the Mexican peso, then: Page 8
Use the following to answer question 30.Scenario: Exchange Rate between Canada and IndiaSuppose that initially the nominal exchange rate 40 rupees per Canadian dollar. The nominal exchange rate has changed to 50 rupees per dollar.30. (Scenario: Exchange Rate between Canada and India) Consider the information provided. Under which scenario will the real exchange rate change by the greatest amount? 31. The primary economic disadvantage of adopting the euro for Britain is: A) the loss of the ability to conduct an independent monetary policy.B) the loss of national pride.C) a decrease in international trade and growth of GDP.D) the risk of a higher rate of unemployment.32. In response to a negative supply shock, the government decreases taxes. The most likely result of this tax decrease will be: Page 9
Use the following to answer questions 33-34. Figure: Change in Demand for Canadian Dollars
You've reached the end of your free preview.
Want to read all 24 pages?