Suppose That Canada Imposed a Tax of 10 Percent on All

Suppose that Canada imposed a tax of 10 percent on all foreign- exchange transactions. We can predict that

A) the Canadian dollar would depreciate by 10 percent in response and no change in trade would occur.
B) the Canadian dollar would appreciate due to increased demand.
C) the tax would reduce the profit of exporters and importers but would not affect the volume of trade.
D) the tax would have no effect on the volume of trade because it affects only Canadians, and not foreigners.
E) the gains from trade would be reduced and less trade would occur.