The interest rate in Canada rises while the interest rate in the United States does not change. The
A) demand curve for Canadian dollars will shift leftward.
B) demand curve for Canadian dollars will shift rightward.
C) demand curve for U.S. dollars will shift rightward.
D) demand curves for both Canadian and U.S. dollars will remain unchanged.

Question

Quizplus · Accepted Answer

Higher interest rates in Canada compared to the United States make Canadian dollar-denominated assets more attractive to investors, increasing the demand for Canadian dollars to purchase these assets.

The Interest Rate in Canada Rises While the Interest Rate