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If Interest Rates in Canada Fall Relative to Interest Rates

Question 11

Multiple Choice

If interest rates in Canada fall relative to interest rates in the US, net capital flows into Canada will
________, causing the supply of US dollars on the Canadian foreign exchange market to ________ and the demand for US dollars to _______.


A) increase, decrease, rise
B) decrease, increase, fall
C) decrease, decrease, rise
D) increase, decrease, fall

Correct Answer:

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