From this information, a) inflation was falling at equal rates in both countries b) inflation in Canada must have been falling faster than in the U....

47. From this information,

a) inflation was falling at equal rates in both countries

b) inflation in Canada must have been falling faster than in the U.S.

c) inflation in the U.S. must have been falling faster than in Canada

d) not enough information to determine relative declines in inflation rates

*48. The Canadian dollar strengthened because

a) the 300 basis point narrowing was too much narrowing

b) the Bank of Canada intervened directly in the foreign exchange market

c) the real interest rate spread must have widened, despite the 300 basis point narrowing

d) there is no rational explanation for the strengthening of the Canadian dollar

49. "Annual inflation is at 35% and expected to rise to 45% by the end of the year. Interest rates are already at 40%. The Zimbabwe dollar has dropped in value by more than 55% this year." The Zimbabwe real interest rate is

positive, and its real exchange rate has decreased

negative, and its real exchange rate has decreased

positive, and its real exchange rate has increased

negative, and its real exchange rate has increased

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