2. The supply of Canadian dollars to the foreign exchange market will increase i

Question

2.   The supply of Canadian dollars to the foreign exchange market will increase if: A.  tourism to Canada increases B.  imports into Canada increase C.  foreign demand for Canadian imports increases D.  Canadian interest rates rise relative to foreign interest rates 2.   The supply of Canadian dollars to the foreign exchange market will increase if: A.  tourism to Canada increases B.  imports into Canada increase C.  foreign demand for Canadian imports increases D.  Canadian interest rates rise relative to foreign interest rates

Explanation / Answer

"B"

As the imports of the nation increase, people will get more of the other currency and less local currency. they will give up Canadian dollar and get foreign currency. It will increase the supply of Canadian dollar supply.

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