In the foreign exchange market for Canadian dollars, which of the following events will definitely raise the Canadian dollar exchange rate?

Question

Accepted Answer

The Canadian interest rate differential rises.

Answer

The expected future exchange rate falls.

Answer

The Canadian demand for imports decreases and the world demand for Canadian exports decreases.

Answer

The world demand for Canadian exports decreases.

Answer

The Canadian demand for imports increases and the world demand for Canadian exports increases.

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