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

Question

Quizplus · Accepted Answer

When Canadian demand for French wine increases, Canadians need more euros to purchase the wine, leading to an increase in the supply of Canadian dollars in the foreign-exchange market as they exchange CAD for euros. Consequently, the demand for euros increases.

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