An increase in the demand for Canadian-made goods will
A)increase the supply of dollars on the foreign exchange market.
B)decrease the supply of dollars on the foreign exchange market.
C)increase the demand for dollars on the foreign exchange market.
D)decrease the demand for dollars on the foreign exchange market.
E)have no impact on the foreign exchange market.

Question

Quizplus · Accepted Answer

An increase in the demand for Canadian-made goods means that more people and businesses in foreign countries want to buy Canadian dollars to purchase those goods. This increases the demand for Canadian dollars on the foreign exchange market and therefore increases the price of Canadian dollars relative to other currencies.

An Increase in the Demand for Canadian-Made Goods Will