[MUST SHOW WORK] Suppose the price of Tim's coffee is C$2.00 in Canada. If the exchange rate changes from C$1=US$0.50 to C$1=US$1, then the price of Tim's Coffee, that an American tourist in Canada pays,

[MUST SHOW WORK] Suppose the price of Tim's coffee is C$2.00 in Canada. If the exchange rate changes from C$1=US$0.50 to C$1=US$1, then the price of Tim's Coffee, that an American tourist in Canada pays,

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 7PA

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Question

Give typing answer with explanation and conclusion

[MUST SHOW WORK]
Suppose the price of Tim's coffee is C$2.00 in Canada. If the exchange rate changes
from C$1=US$0.50 to C$1=US$1, then the price of Tim's Coffee, that an American
tourist in Canada pays,
Select one:
A. goes down from US$2 to US$1.
B. goes up from US$0.5 to US$1.
C.
goes down from US$1 to US$0.5.
O D. goes up from US$1 to US$1.5.
O E. goes up from US$1 to US$2.

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