Question

An increase in the demand for the Canadian dollar will lead to
A.
an appreciation of the Canadian dollar and a higher quantity of Canadian dollars
traded
B.
a depreciation of the Canadian dollar and a higher quantity of Canadian dollars traded
C.
an appreciation of the Canadian dollar and a lower quantity of Canadian dollars
traded
D.
a depreciation of the Canadian dollar and a lower quantity of Canadian dollars traded.

Answer 1

Answer:

A. an appreciation of the Canadian dollar and a higher quantity of Canadian dollars

traded

Explanation:

An increase in the demand for the Canadian dollar will lead to

an appreciation of the Canadian dollar and a higher quantity of Canadian dollars traded.

When, the demand for Canadian dollar increases, it means, the Canadian dollar will appreciate against other currencies and higher quantity of the Canadian dollar will be traded.

A rightward shift in demand( increase) means the demand curve has moved up along the

supply curve causing the price of the currency measured on the horizontal axis to increase.