Question

Using the following table, calculate the missing exchange rates Price of one Canadian doses of foreign Country Currency Price of one unit of foreign currency in Canadian dollars Number USA Do Pound I Number France Euro Number Japan I Number Polo 0.015 Mexico

Answer 1

Q1.

Given,

a) $1 = 1.36 CA$

=> 1 CA$ = $1/1.36 = $0.74

b) 1 CA$ = 0.49 pounds

=> 1 pound = (1/0.49) CA$ = 2.04 CA$

c) 1 euro = 0.17 CA$

=> 1 CA$ = (1/0.17) euro = 5.88 euros

d) 1 CA$ = 117.5975 yen

=> 1 yen = (1/117.5975) CA$ = 0.0085 CA$

e) 1 peso = 0.015 CA$

=> 1 CA$ = (1/0.015) peso = 66.67 pesos

Country	Currency	Price of 1 unit of foreign currency in Canadian dollars	Price of 1 canadian dollar in terms of foreign currency
U.S.A	Dollar	1.36	0.74
Britain	Pound	2.04	0.49
France	Euro	0.17	5.88
Japan	Yen	0.0085	117.5975
Mexico	Peso	0.015	66.67

Q2.

a) Increase of Central bank deposist in chartered bank - Neither

Increase of chartered bank deposits(also called as bank reserves) with the Central bank is a monetary policy tool. Not the vice versa

b) Increasing the reserve ratio - Monetary policy (decided by the FOMC)

c) Make low interest rate loans to companies where the government pays the difference between the real and subsidised interest rates - Fiscal policy (decided by the government)