Question

24. A citizen of Saudi Arabia uses previously obtained Canadian dollars to purchase apples from Canada. Which of them following correctly identifies the effects of this transaction? A. It increases Saudi net capital outflow and increases Canadian net exports. B. It increases Saudi net capital outflow and decreases Canadian net exports. OC. It decreases Saudi net capital outflow and increases Canadian net exports. D. It decreases Saudi net capital outflow and decreases Canadian net exports. 25. If the exchange rate is 175 yen - $1, what is the cost of a bottle of rice wine that costs 5250 yen7 A. 28 B. 30 c. 32 D. 34

Answer 1

24. In this situation, when a person from Saudi Arabia buys apples from canada, he is paying to the merchant or another country which results in increased Saudi net capital outflow. When the apples are exported it will increase the net exports of Canada. Hence option A is the answer.

25. If 175 yen = $1

Then 5250 yen = 5250/175= $30.

Option B is the correct answer.

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