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Canada's main trading partners in terms of exports are US (78.5%), China (3.8%) and UK (2.5%). Assume that the Canadian dollar has depreciated relative to the U.S. dollar, it has appreciated relative to the Chinese yuan and has appreciated relative to the UK pound. What has happened to the value of the dollar based on the effective exchange rate? Explain.

Canada's main trading partners in terms of exports are US (78.5%), China (3.8%) and UK (2.5%). Assume that the Canadian dollar has depreciated relative to the U.S. dollar, it has appreciated relative to the Chinese yuan and has appreciated relative to the UK pound. What has happened to the value of the dollar based on the effective exchange rate? Explain.

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter11: Foreign Exchange, Trade, And Bubbles
Section: Chapter Questions
Problem 9MC
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Canada's main trading partners in terms of exports are US (78.5%), China (3.8%) and UK (2.5%). Assume that the Canadian dollar has depreciated relative to the U.S. dollar, it has appreciated relative to the Chinese yuan and has appreciated relative to the UK pound. What has happened to the value of the dollar based on the effective exchange rate? Explain.
Transcribed Image Text:Canada's main trading partners in terms of exports are US (78.5%), China (3.8%) and UK (2.5%). Assume that the Canadian dollar has depreciated relative to the U.S. dollar, it has appreciated relative to the Chinese yuan and has appreciated relative to the UK pound. What has happened to the value of the dollar based on the effective exchange rate? Explain.
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