Q3-4 Suppose that Canada decides to peg its dollar ($C or the loonie) to the US dollar at an exchange rate of $C1 =$US1. What will happen to Canadian interest rates as a result of the leftward shift in the US IS curve? Select one: a. They will rise. b. They will fall. c. They will not change. d. The IS curve will show an increase
Q3-4 Suppose that Canada decides to peg its dollar ($C or the loonie) to the US dollar at an exchange rate of $C1 =$US1. What will happen to Canadian interest rates as a result of the leftward shift in the US IS curve? Select one: a. They will rise. b. They will fall. c. They will not change. d. The IS curve will show an increase
Chapter6: An Introduction To The Foreign Exchange Market And The Balance Of Payments
Section: Chapter Questions
Problem 1E
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Q3-4
Suppose that Canada decides to peg its dollar ($C or the loonie) to the US dollar at an exchange rate of $C1 =$US1. What will happen to Canadian interest rates as a result of the leftward shift in the US IS curve?
Select one:
a. They will rise.
b. They will fall.
c. They will not change.
d. The IS curve will show an increase.
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