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.Ceteris paribus,under a system of flexible exchange rates,we can expect the British demand for Canadian dollars to:

A) increase, the supply of Canadian dollars for pounds to decrease, and the dollar to appreciate vis-a-vis the pound
B) decrease, the supply of Canadian dollars for pounds to decrease, and the dollar to either appreciate or depreciate vis-a-vis the pound
C) decrease, the supply of Canadian dollars for pounds to increase, and the dollar to depreciate vis-a-vis the pound
D) increase, the supply of Canadian dollars for pounds to decrease, and the dollar to depreciate vis-a-vis the pound
E) increase, the supply of Canadian dollars for pounds to decrease, and a Canadian balance of payments surplus to develop