Currency Traders Expect the Canadian Dollar to Depreciate

Multiple Choice

Currency traders expect the Canadian dollar to depreciate.What impact will this have on equilibrium in the foreign exchange market?

A) The Canadian dollar will appreciate and the equilibrium quantity of Canadian dollars will decrease.
B) The Canadian dollar will depreciate and the equilibrium quantity of Canadian dollars exchanged will decrease.
C) The Canadian dollar will appreciate and the equilibrium quantity of Canadian dollars will increase.
D) The Canadian dollar will depreciate and the change in the equilibrium quantity of Canadian dollars exchanged cannot be determined.
E) The Canadian dollar will depreciate and the equilibrium quantity of Canadian dollars exchanged will increase.