If interest rates in Canada fall,
A) the value of the Canadian dollar will fall as foreign investors decrease their holdings of Canadian investments.
B) the value of the Canadian dollar will rise as foreign investors increase their holdings of Canadian investments.
C) the value of the Canadian dollar will fall as foreign investors increase their holdings of Canadian investments.
D) the value of the Canadian dollar will rise as foreign investors decrease their holdings of Canadian investments.
E) the value of the Canadian dollar will fall as domestic investors purchase fewer foreign bonds.
Correct Answer:
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