What happens if there is a shortage or a surplus of Canadian dollars in the foreigh exchange market? C If a shortage of Canadian dollars occurs in the foreign exchange market, and the exchange rate the OA. quantity of Canadian dollars demanded increases and the quantity of Canadian dollars supplied decreases; falls OB. demand for Canadian dollars increases and the supply of Canadian dollars decreases; rises OC. quantity of Canadian dollars demanded decreases and the quantity of Canadian dollars supplied increases; 120- 1104 100 90- 80- 70- 60- S D
What happens if there is a shortage or a surplus of Canadian dollars in the foreigh exchange market? C If a shortage of Canadian dollars occurs in the foreign exchange market, and the exchange rate the OA. quantity of Canadian dollars demanded increases and the quantity of Canadian dollars supplied decreases; falls OB. demand for Canadian dollars increases and the supply of Canadian dollars decreases; rises OC. quantity of Canadian dollars demanded decreases and the quantity of Canadian dollars supplied increases; 120- 1104 100 90- 80- 70- 60- S D
Chapter29: International Finance
Section: Chapter Questions
Problem 8P
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Transcribed Image Text:What happens if there is a shortage or a surplus of Canadian dollars in the foreign
exchange market?
***
If a shortage of Canadian dollars occurs in the foreign exchange market,
the
and the exchange rate
A
O A. quantity of Canadian dollars demanded increases and the quantity of
Canadian dollars supplied decreases;
falls
OB. demand for Canadian dollars increases and the supply of Canadian
dollars decreases;
rises
OC. quantity of Canadian dollars demanded decreases and the quantity of
Canadian dollars supplied increases;
COLL
120-
110
100+
90-
80-
70-
Exchange rate (U.S. cents per Canadian dollar)
S
60+
D
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