When interest rates decrease in Canada,the value of the dollar is likely to

Question

Quizplus · Accepted Answer

When interest rates decrease, foreign investors are less attracted to Canadian bonds and short-term securities, causing a decrease in the demand for Canadian dollars, resulting in a decrease in the value of the dollar. A lower value of the Canadian dollar makes Canadian exports cheaper and more competitive in foreign markets, which leads to an increase in net exports.

When Interest Rates Decrease in Canada,the Value of the Dollar