If the demand for the yen increases relative to the Canadian dollar, which of the following would occur?
A)The Canadian dollar will appreciate.
B)The yen will depreciate.
C)The Canadian dollar will depreciate.
D)The demand for the Canadian dollar will increase.
E)The quantity of yen will decrease.

Question

Quizplus · Accepted Answer

When the demand for the yen increases relative to the Canadian dollar, it means that more people want yen and are willing to exchange Canadian dollars for it. This increased demand for yen leads to its appreciation, while the Canadian dollar, being less in demand, depreciates in value.

If the Demand for the Yen Increases Relative to the Canadian