Over they next one year, prices in Canada and the U.S. are expected to go up by
ID: 1141972 • Letter: O
Question
Over they next one year, prices in Canada and the U.S. are expected to go up by 1 percent and 2 percent respectively. If relative PPP between CAD and USD holds, the price of CAD in terms of USD will ____??A. Decrease by 1% B. Increase by 3% C. Decrease by 3%
Which is right? And why??
*PPP: Purchasig Power Parity Over they next one year, prices in Canada and the U.S. are expected to go up by 1 percent and 2 percent respectively. If relative PPP between CAD and USD holds, the price of CAD in terms of USD will ____??
A. Decrease by 1% B. Increase by 3% C. Decrease by 3%
Which is right? And why??
*PPP: Purchasig Power Parity Over they next one year, prices in Canada and the U.S. are expected to go up by 1 percent and 2 percent respectively. If relative PPP between CAD and USD holds, the price of CAD in terms of USD will ____??
A. Decrease by 1% B. Increase by 3% C. Decrease by 3%
Which is right? And why??
*PPP: Purchasig Power Parity
A. Decrease by 1% B. Increase by 3% C. Decrease by 3%
Which is right? And why??
*PPP: Purchasig Power Parity
Explanation / Answer
Canada inflation rate is = 1 %
US inflation rate is = 2 %
US inflation is larger by 1 %, hence US dollar will depreciate by 1 % and Canadian currency will appreciate by 1 %.
CAD in term of USD will Decrease by 1% (A)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.