Consider the market in which Canadian dollars are exchanged for British pounds.An increased preference of British consumers for Canadian goods would

Question

Quizplus · Accepted Answer

An increased preference of British consumers for Canadian goods would mean that more British pounds are needed to buy Canadian dollars, shifting the supply-of-pounds curve to the right. This increase in supply of pounds relative to Canadian dollars would lead to a fall in the exchange rate, making pounds cheaper in terms of Canadian dollars.

Consider the Market in Which Canadian Dollars Are Exchanged for British