An Increase in Income in the United States Would Have

Multiple Choice

An increase in income in the United States would have what effect on the equilibrium exchange rate and equilibrium quantity of Canadian dollars in the foreign exchange market?

A) decrease in the exchange rate and decrease in the quantity
B) decrease in the exchange rate and no effect on the quantity
C) increase in the exchange rate and decrease in the quantity
D) no change in the exchange rate and increase in the quantity
E) increase in the exchange rate and increase in the quantity