If Canadian demand for French wine increases,the supply of Canadian dollars to the foreign-exchange market will ________ and the demand for euros will ________.

Question

Quizplus · Accepted Answer

When Canadian demand for French wine increases, Canadians need more euros to buy the wine. This leads to an increase in the supply of Canadian dollars in the foreign-exchange market as Canadians exchange their currency for euros. Simultaneously, the demand for euros increases because Canadians are buying euros with their dollars to pay for the wine.

If Canadian Demand for French Wine Increases,the Supply of Canadian