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-(Figure: Change in Demand for Canadian Dollars) Refer to Figure: Change in the Demand for Canadian Dollars.A movement from E₂ to E₁ in this foreign exchange market would cause Canadians to purchase _____ goods and services from Europe.

Question

Use the following to answer questions:

-(Figure: Change in Demand for Canadian Dollars) Refer to Figure: Change in the Demand for Canadian Dollars.A movement from E₂ to E₁ in this foreign exchange market would cause Canadians to purchase _____ goods and services from Europe.

Quizplus · Accepted Answer

A movement from E₂ to E₁ indicates a decrease in the demand for Canadian dollars. This means that Canadians will have fewer Canadian dollars to exchange for euros and will have to pay more Canadian dollars to purchase the same amount of euros. As a result, Canadians will purchase fewer goods and services from Europe. Therefore, the best choice is B (less).

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