The nominal interest rate in the U. S. is 5% and the nominal interest rate in Canada is 3%. The spot value of the U. S. dollar is 1 ($/Canadian dollar) and the forward rate is 1.2 ($/Canadian dollar). Which of the following is not true?A. The interest parity condition does not hold. B. The dollar is likely to appreciate in spot markets.
C. Money will flow into the Canada.
D. The dollar is trading at a forward discount.

7. problems and applications q7 congress and the president decide that the united states should reduce air pollution by reducing its use of gasoline. they impose a $0.50 tax on each gallon of gasoline sold. suppose they decided to impose the tax on consumers. in the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve. demand supply 0 1 2 3 4 5 6 3.0 2.5 2.0 1.5 1.0 0.5 0 price of gasoline (dollars per gallon) quantity of gasoline (thousands of gallons) demand s 1 s 2 true or false: the price producers receive will be higher if the tax were imposed on consumers. true false if the demand for gasoline were more elastic, this tax would be effective in reducing the quantity of gasoline consumed. true or false: consumers of gasoline are by this tax. true false workers in the oil industry are by this tax.