A higher Canadian interest ratewill a.decrease the demand for Canadian dollars b

Question

A higher Canadian interest ratewill

a.decrease the demand for Canadian dollars because more people movemoney into Canada to take advantage of the higher interestrate.

b.not affect the demand for Canadian dollars.

c.decrease the demand for Canadian dollars because more people movemoney out of Canada to take advantage of the higher interestrate.

d.increase the demand for Canadian dollars because more people movemoney out of Canada to take advantage of the higher interestrate.

e.increase the demand for Canadian dollars because more people movemoney into Canada to take advantage of the higher interestrate.

Explanation / Answer

c.decrease the demand for Canadian dollars because more people movemoney out of Canada to take advantage of the higher interestrate.
Canadian dollar would appreciate which cause less demand but peopleare willing to exchange from Canadian dollar for other currency dueto its high exchange rate

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