Question: If foreign countries increase their interest rates then what will happen to the capital inflow in Canada? b) If US citizens sell Canadian bonds then

If foreign countries increase their interest rates then what will happen to the capital inflow in Canada?

b) If US citizens sell Canadian bonds then what will be the impact on the Canadian currency

c) Suppose it costs C$1.35 to buy one US$, and the price level or index in the US is 120. The price level or index in Canada is 115. What is the real exchange rate from Canada's perspective?

d) Consider a country with a xed exchange rate that has a current account surplus of $20 billion, but a nancial account decit of $18 billion. Is its balance of payments in decit or surplus? Why? Is the central bank buying or selling foreign currency?

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2. Ask questions, listen rather than attempt to persuade.

9. How much of the information collected will be used in decision-making?

1. Background knowledge of the subject and