In Determining the Exchange Rate Between the Canadian Dollar and British

question 104

Multiple Choice

In determining the exchange rate between the Canadian dollar and British pound, if Canadian income increases, then

• A)the demand for pounds will increase, leading to depreciation of the Canadian dollar, assuming exchange rates are allowed to float
• B)the demand for pounds will increase, leading to depreciation of the Canadian dollar, assuming exchange rates are fixed
• C)the demand for pounds will increase, leading to appreciation of the Canadian dollar, assuming exchange rates are allowed to float
• D)the demand for pounds will increase, leading to appreciation of the Canadian dollar, assuming exchange rates are fixed
• E)the supply of pounds will shift to the left, causing appreciation of the Canadian dollar, assuming exchange rates are fixed

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