The Canadian exchange rate appreciates if
A)prices increase in the United States and other countries but remain constant in Canada.
B)the Canadian interest rate falls.
C)the U.S. interest rate rises.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

If prices increase in the United States and other countries but remain constant in Canada, Canadian goods become relatively cheaper, increasing demand for Canadian dollars, leading to an appreciation of the Canadian exchange rate.

The Canadian Exchange Rate Appreciates If