In determining the exchange rate between the Canadian dollar and the British pound, suppose Canadian income increases.All things equal, what would happen to the Canadian demand for the British pound?

Question

Quizplus · Accepted Answer

As Canadian income increases, the demand for foreign goods, including British goods, increases. This leads to an increase in the Canadian demand for the British pound, as Canadians need to exchange Canadian dollars to purchase British goods.

In Determining the Exchange Rate Between the Canadian Dollar and the British