Suppose that Canada's demand for imports decreases. All other things equal,
A)the demand for Canadian dollars decreases and the supply of Canadian dollars increases.
B)the demand for Canadian dollars increases.
C)both the supply of and demand for Canadian dollars decreases.
D)the supply of Canadian dollars decreases.
E)the supply of Canadian dollars decreases and demand for Canadian dollars increases.

Question

Quizplus · Accepted Answer

When Canada's demand for imports decreases, Canadians need fewer foreign currencies to pay for imports, leading to a decrease in the supply of Canadian dollars in the foreign exchange market.

Suppose That Canada's Demand for Imports Decreases