How would Canadian monetary authorities go about strengthening the dollar?

Question

Quizplus · Accepted Answer

Buying dollars in the foreign exchange market would increase the demand for Canadian dollars, which would strengthen its value. Selling dollars in the foreign exchange market (option A) would have the opposite effect, as it would increase the supply of Canadian dollars relative to other currencies, leading to a decrease in its value. Declaring the dollar devalued (option C) would have little effect on the exchange rate, as it would not address the underlying supply and demand factors in the foreign exchange market. Selling dollars and buying only euros (option D) would not necessarily strengthen the Canadian dollar, as it would depend on the relative demand for euros versus Canadian dollars in the market.

How Would Canadian Monetary Authorities Go About Strengthening the Dollar