In May of 1970, Canadian authorities abandoned their fixed exchange rate policy which had, for many years, fixed the Canadian dollar at $0.925 U.S. Within a few weeks the freely floating rate was around $0.95. Based on this information what can be deduced? Select one: • A. Canadians significantly decreased their rate of cross-border shopping. B. Canada probably had a large balance of payments deficit prior to the change. * C. Canada probably had a current account surplus. D. Canada previously had an under-valued currency.
In May of 1970, Canadian authorities abandoned their fixed exchange rate policy which had, for many years, fixed the Canadian dollar at $0.925 U.S. Within a few weeks the freely floating rate was around $0.95. Based on this information what can be deduced? Select one: • A. Canadians significantly decreased their rate of cross-border shopping. B. Canada probably had a large balance of payments deficit prior to the change. * C. Canada probably had a current account surplus. D. Canada previously had an under-valued currency.
Chapter29: International Finance
Section: Chapter Questions
Problem 8P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax