Under a system of flexible exchange rates, what will correct a deficit in a country's balance of payments?   a. an appreciation in the nation's currency     b. a decline in the nation’s domestic price level     c. a depreciation in the nation's currency     d. an increase in the nation’s inflation rate   2. Which of the following would supply Canadian dollars to the foreign exchange market?   a. an increase in the number of Canadians going to Las Vegas over the holidays     b. an increase in spending due to American tourists in Canada     c. the sale of a Canadian corporation to a German investor     d. the sale of wheat from Manitoba to a European bakery

Brief Principles of Macroeconomics (MindTap Course List)
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Chapter13: Open-economy Macroeconomics: Basic Concepts
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Under a system of flexible exchange rates, what will correct a deficit in a country's balance of payments?

  a. an appreciation in the nation's currency  
  b. a decline in the nation’s domestic price level  
  c. a depreciation in the nation's currency  
  d. an increase in the nation’s inflation rate  

2. Which of the following would supply Canadian dollars to the foreign exchange market?

  a. an increase in the number of Canadians going to Las Vegas over the holidays  
  b. an increase in spending due to American tourists in Canada  
  c. the sale of a Canadian corporation to a German investor  
  d. the sale of wheat from Manitoba to a European bakery  

 

 

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