Which of the following statements best describes the movement of the Canadian dollar against the U.S.dollar in the period 2002-2008?
A)The Canadian dollar appreciated because demand for natural resources such as oil increased.
B)The Canadian dollar depreciated because demand for commodity decreased.
C)The Canadian dollar appreciated because the U.S.exports to Canada increased.
D)The Canadian dollar depreciated because the interest rate in Canada was lower than U.S.

Question

Quizplus · Accepted Answer

During 2002-2008, the Canadian dollar appreciated because of increased demand for natural resources such as oil, which Canada exports at significant levels. As demand for these exports increased, there was a corresponding increase in demand for the Canadian dollar, causing it to appreciate against the U.S. dollar.

Which of the Following Statements Best Describes the Movement of the Canadian