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.
Chapter1: Making Economics Decisions
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![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. X
C. Canada probably had a current account surplus.
D. Canada previously had an under-valued currency.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fab58594b-17fa-41db-b481-f313b45a507b%2F2b296635-f095-400b-8923-095108e5f6e8%2Fe99i9rm_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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. X
C. Canada probably had a current account surplus.
D. Canada previously had an under-valued currency.
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