FIGURE 34-5 -Refer to Figure 34-5.Suppose Canada Has a System of Fixed

FIGURE 34-5
-Refer to Figure 34-5.Suppose Canada has a system of fixed exchange rates.A decrease in the world's demand for Canadian exports will

A) require the Bank of Canada to accommodate the excess demand for Canadian dollars.
B) require the Bank of Canada to purchase foreign-currency reserves.
C) shift the AD curve to the left more than would have occurred under a flexible exchange rate.
D) shift the AD curve to the left less than would have occurred under a flexible exchange rate.
E) have less effect on national income than if the exchange rate had been flexible.