Other things being equal, if the Canadian dollar depreciates, the quantity of foreign exchange demanded will decline because

Question

Quizplus · Accepted Answer

When the Canadian dollar depreciates, foreign goods become relatively more expensive for Canadians, which decreases the demand for foreign currency needed to purchase those goods. This means that the Canadian dollar price of foreign goods will rise, making them less attractive to Canadian consumers.

Other Things Being Equal, If the Canadian Dollar Depreciates, the Quantity