Given Floating Exchange Rates, a Simultaneous Decrease in the Canadian

question 46

Multiple Choice

Given floating exchange rates, a simultaneous decrease in the Canadian demand for British products and increase in the British desire to invest in Canadian government securities would cause a(n)

• A) appreciation of the pound against the dollar.
• B) depreciation of the pound against the dollar.
• C) unchanged pound/dollar exchange rate.
• D) appreciation of both the pound and dollar.