Last week, six Swedish kronor could purchase one Canadian dollar.This week, it takes eight Swedish kronor to purchase one Canadian dollar.This change in the value of the dollar will ________ exports from Canada to Sweden and ________ Canadian aggregate demand.
A)increase; increase
B)decrease; decrease
C)increase; decrease
D)decrease; increase

Question

Quizplus · Accepted Answer

The appreciation of the Canadian dollar relative to the Swedish krona makes Canadian goods more expensive in Sweden, likely decreasing exports from Canada to Sweden. As imports become cheaper relative to domestic goods, Canadian aggregate demand for domestic goods decreases, shifting towards imports.

Last Week, Six Swedish Kronor Could Purchase One Canadian Dollar