[15] 3. Put your answers in the exam booklet (do n_ot explain; just fill in the blanks). (a) If $1 Canadian is worth 66 2/3 cents US. (or about 67 cents U.S.), then $1 U.S. is worth about $ Canadian. The exchange rate today is denoted st. When the variable st increases, there is of the domestic currency (relative to the foreign currency) today. (b) In the intertemporal theory of net exports (with the standard assumptions), a temporary increase in output causes net exports to in the current period. The marginal propensity to consume, in this case, equals . (c) Consider the twosector model, and assume that the central bank holds the price level xed. In the long run, an exogenous increase in the foreign price of the traded good causes the domestic price of the traded good to and the domestic currency to (relative to the foreign currency). ((1) When the commodity price index falls (in a certain month), the Canadian dollar (relative to the US. dollar) tends to (in that month). The forward exchange rate can be used as a market-based measure of the e _ (e) In the 'interest rate parity' equation, suppose the term [#:I equals 0.03, or 3%. Investors t the U.S. dollar (relative to the Canadian dollar) to by 3% over the next year