How Would an Increase in the Canadian Federal Budget Deficit

question 94

Multiple Choice

How would an increase in the Canadian federal budget deficit affect the exchange rate in the market for Canadian dollars?

• A)The exchange rate will increase.
• B)The exchange rate will decrease.
• C)The exchange rate will not be affected by a change in the federal budget deficit.
• D)The impact of the increase in the federal budget deficit on the exchange rate cannot be predicted.

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