Suppose Interest Rates Fall Sharply in Canada but Are Unchanged

Multiple Choice

Suppose interest rates fall sharply in Canada but are unchanged in Great Britain.Other things unchanged, under a system of flexible exchange rates we can expect the demand for pounds in Canada to:

A) decrease, the supply of pounds to increase, and the dollar to appreciate relative to the pound.
B) increase, the supply of pounds to increase, and the dollar may either appreciate or depreciate relative to the pound.
C) increase, the supply of pounds to decrease, and the dollar to depreciate relative to the pound.
D) decrease, the supply of pounds to increase, and the dollar to depreciate relative to the pound.