Pegged Currency and International Trade. Assume that Canada decides to peg its currency (the Canadian dollar) to the U.S. dollar and that the exchange rate will remain fixed. Assume that Canada commonly obtains its imports from the U.S. and Mexico. The U.S. commonly obtains its imports from Canada and Mexico. Mexico commonly obtains its imports from the U.S. and Canada. The traded products are always invoiced in the exporting country’s currency. Assume that the Mexican peso depreciates substantially against the U.S. dollar during the next year. 1) What is the likely effect (if any) of the peso’s exchange rate movement on the volume of Canada’s exports to Mexico? Explain. ANS://The Peso depreciated against Canadian dollar, so Canadian exports to Mexico should decrease 2)What is the likely effect (if any) of the peso’s exchange rate movement on the volume of Canada’s exports to the U.S.? Explain. ANS://The US should demand less from Canada ( demand more from Mexico), so Canadian export will decrease
Fill in Order Details
- Submit paper details for free using our simple order form
Make Payment Securely
- Add funds to your account. There are no upfront payments. The writer will only be paid once you have approved your paper
- The best qualified expert writer is assigned to work on your order
- Your paper is written to standard and delivered as per your instructions
Download your paper
- Download the completed paper from your online account or your email
- You can request a plagiarism and quality report along with your paper
Consider Your Assignments Done
See Why Our Clients Hire Us Again And Again!
Elite Academic Research Promises You:
When you order form the best, some of your greatest problems as a student are solved!