Q3. A) You just came back from Canada, where the Canadian dollar was worth $.70. You...

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Q3. A) You just came back from Canada, where the Canadian dollar was worth $.70. You still have C$200 from your trip and could exchange them for dollars at the airport, but the airport foreign exchange desk will only buy them for $.60. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for $.10 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your C$200 for 1,300 pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain. B) Explain this figure in perspective of USA: (15 marks) Tmde-Retated Factors US Demand tar Fartgn Good uS. Demand for the Forign Curreicy Infaton Dihrental Incame Dimrmita Supply ef the Forkn Curmncy for Sale Goverment Trade Rastrictim Foreign Demand tor US. Goods Exchange Rate betwoin the Fareign Cumncy and the Dolar Financial Factors U.S. Demand US. Demand for the Forign Carrcy for Forign Securtes Interent Rate Drmerental Capital Fow Restrictem Fomign Demand tor Supply of he Farekyn Currncy for Sale U.S. Securties Q3. A) You just came back from Canada, where the Canadian dollar was worth $.70. You still have C$200 from your trip and could exchange them for dollars at the airport, but the airport foreign exchange desk will only buy them for $.60. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for $.10 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your C$200 for 1,300 pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain. B) Explain this figure in perspective of USA: (15 marks) Tmde-Retated Factors US Demand tar Fartgn Good uS. Demand for the Forign Curreicy Infaton Dihrental Incame Dimrmita Supply ef the Forkn Curmncy for Sale Goverment Trade Rastrictim Foreign Demand tor US. Goods Exchange Rate betwoin the Fareign Cumncy and the Dolar Financial Factors U.S. Demand US. Demand for the Forign Carrcy for Forign Securtes Interent Rate Drmerental Capital Fow Restrictem Fomign Demand tor Supply of he Farekyn Currncy for Sale U.S. Securties

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ANSWER Exchange with the tourist If you exchange the C ... View the full answer