Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 36, Problem 1E
To determine
To find:
The exchange rate between the U.S. and Canadian dollars
Expert Solution & Answer
Explanation of Solution
Under gold standards, every country have a fixed value in terms of gold. Such method helps to maintain fixed exchange rates between countries.
Under the gold standard, if the price of an ounce of gold is 1,400 U.S. dollars (USD) and 1,300 Canadian dollars, then the exchange rate between U.S. and Canadian dollars(CD) will be 0.93.
USD per CD
Economics Concept Introduction
Gold standard exchange rate system:
Gold standard exchange rate system is a system in which a country's currency has a value directly linked with gold.
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