-Under a System of Fixed Exchange Rates,the Shift in Demand

Multiple Choice

-Under a system of fixed exchange rates,the shift in demand from D₀ to D₁ and in supply from S₀ to S₁ will cause:

A) no change in Canada's stocks of international monetary reserves
B) a British balance-of-payments deficit
C) a Canadian balance-of-payments deficit
D) a Canadian balance-of-payments surplus
E) an immediate fall in the value of the Canadian dollar