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If Consumers in Europe and Asia Develop Strong Preferences for Canadian

Question 12

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If consumers in Europe and Asia develop strong preferences for Canadian goods,what impact will this have on Canada's current account?


A) It will not be affected since purchases of Canadian goods by foreigners are recorded in the capital account.
B) It will not be affected since purchases of Canadian goods based on mere preferences are recorded under statistical discrepancy.
C) It will move toward surplus, since purchases of Canadian goods are recorded as credits on our current account.
D) It will move toward deficit, since purchases of Canadian goods by foreigners are counted as debits in our current account.

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