Which of the following factors influence the demand for Canadian dollars?
A)The exchange rate and the world demand for Canadian exports.
B)Interest rates in Canada and other countries, and the expected future exchange rate.
C)The world demand for Canadian exports and Canadian demand for imports.
D)Both A and B.
E)Both B and C.

Question

Quizplus · Accepted Answer

The exchange rate and the world demand for Canadian exports (factor A) and interest rates in Canada and other countries, and the expected future exchange rate (factor B) both have significant impacts on the demand for Canadian dollars. Factors C and E only relate to the balance of trade and are not direct drivers of currency demand.

Which of the Following Factors Influence the Demand for Canadian