How Would a Decrease in the Canadian Budget Deficit Affect

question 196

Multiple Choice

How would a decrease in the Canadian budget deficit affect the exchange rate in the market for dollars?

• A)The exchange rate will increase.
• B)The exchange rate will decrease.
• C)The quantity of dollars traded for foreign currencies will rise.
• D)The exchange rate will not be affected by a change in the budget deficit.
• E)The impact of the decrease in the budget deficit on the exchange rate cannot be predicted.

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