If interest rates in Canada fall below those in the rest of the world, then
a. it depreciates Canada's exchange rate and this may result in a surplus on Canada's current account
b. the demand for Canadian dollars increases
c. exports from Canada to other countries decrease
d. imports into Canada from other countries increase
e. the balance of payments becomes negative
A
You might also like to view...
What is the relationship between marginal cost and marginal revenue when a single-price monopoly maximizes profit?
What will be an ideal response?
From 1980 to 2000, the yen—dollar exchange rate fell from 240 yen/dollar to 102 yen/dollar, while the dollar—pound exchange rate fell from 2.22 dollars/pound to 1.62 dollars/pound. As a result
A) the dollar appreciated relative to the yen, but depreciated relative to the pound. B) the dollar depreciated relative to the yen, but appreciated relative to the pound. C) the dollar appreciated relative to both the yen and the pound. D) the dollar depreciated relative to both the yen and the pound.