6. (Bonus question: 4 bonus marks) Imagine a situation where Canada and the USA

Question

6. (Bonus question: 4 bonus marks) Imagine a situation where Canada and the USA are embroiled in a trade dispute. The USA passes a law saying that a Canadian dollar is worth only 50 cents in the USA, and in retaliation Canada passes a law saying that an American dollar is worth only 50 cents in the Canada. While this is going on, a citizen of Tswwassen, BC, walks across the border to Point Roberts, WA, goes into a bar, orders a $5 beer, pays for it with an American ten dollar bill, and receives a Canadian ten dollar bill in change. He then walks back to Tsawwassen, goes into a bar, orders $5 beer, pays for it with the Canadian ten dollar dollar bill, and receives an American ten dollar bill in change. He quickly realizes he's on to a good thing, and repeats the process several times per day for the next few months, until the bars run out of foreign ten dollar bills. At the end of the time, he still has his S10 in American money. The barkeepers were paid in full for each transaction. Who paid for the drinks?

Explanation / Answer

Tswwassen, BC is in Canada and position Roberts, WA is in USA.

at the present, a person goes to meeting Roberts and pays by income of US funds of $10 for $5 nip, so he ought to be given back $5 for his beer, now instead he receives $10 canadian cash

this is applicable as in USA $10 canadian change is merit 0.5 cents so he is really receiving the same worth as $5 dollars USA capital.

at this time, he go to canadian surface and pays for $5 beer with canadian funds $10, so he ought to obtain rear $5 canadian riches, but in its place he receive $10 american wealth

This is as well compelling seeing as in canada american capital is 0.5 cents. that's why yet again, he receives the same attraction as $5 canadian wealth as $10 american currency.

This go on, and the person pays for his cocktail in full consistently while maintain his in fact capital.

The chap remunerated for the snacks consistently but due the legal tender value he until the end of time had the equal total.

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