1.

If the rate of return is 3 percent in Mexico and 1 percent in Canada, the O A. rate of return in Mexico is expected to fall to 1 percent. O B. rate of return in Canada is expected to rise to 3 percent. O C. law of one price predicts a single international rate of return between 3 percent and 1 percent. O D. Mexican peso is expected to appreciate against the Canadian dollar by 2 percent. O E. Mexican peso is expected to depreciate against the Canadian dollar by 2 percent.When the inflation rate is 4 percent, the Bank of Canada will O A. buy bonds to raise interest rates and slow down the economy. O B. sell bonds to raise interest rates and decrease aggregate demand. O C. sell bonds to lower interest rates and accelerate the economy. O D. buy bonds to lower interest rates and increase aggregate demand. O E. do nothing, since an interest rate of 4 percent is desirable.1ultl'hen Michael from lEintan'o buys hockey tickets in Michigan to watch the Maple Leafs crush the Red Winge the effect on the foreign exchange market is a E: D A. rightward shift of the supply curve of Canadian dollars. D E. leftward shift of the supply curve of US. dollars. D C. leftward shift of the demand curve for US. dollars. 0 D. rightward shift of the demand curve for Canadian dollars. 0 E. rightward shift of the supply curve of US. dollars. Consumption, C = 250 + 0.8 Yd Investment, I = 200 Government Spending, G = 100 Taxes, T = 0.2 Y Net Exports, NX = 50 - 0.14 Y Disposable Income, Yd = Y - T Real GDP = Y Calculate C for this economy? O A. 115 O B. 910 O C. 1012 O D. 1050 O E. 1018\fTo increase aggregate demand, the Bank of Canada O A. sells bonds, decreasing chartered bank reserves, increasing lending, and raising the overnight rate. O B. buys bonds, increasing chartered bank reserves, increasing lending, and lowering the overnight rate. O C. sells bonds, decreasing chartered bank reserves, decreasing lending, and raising the overnight rate. O D. sells bonds, decreasing chartered bank reserves, decreasing lending, and lowering the overnight rate. O E. buys bonds, increasing chartered bank reserves, increasing lending, and raising the overnight rate