A change in the exchange rate, other things remaining the same, brings a
A)shift of the supply curve for Canadian dollars with no movement along the supply curve.
B)change in the quantity of Canadian dollars supplied and a shift of the supply curve.
C)shift of the supply curve for Canadian with a movement along the demand curve.
D)change in the quantity of Canadian dollars supplied with no movement along the supply curve.
E)change in the quantity of Canadian dollars supplied and a movement along the supply curve.

Question

Quizplus · Accepted Answer

A change in exchange rate will affect the quantity of Canadian dollars supplied as it impacts the price of the currency, causing a movement along the supply curve. At the same time, it will also cause a shift in the supply curve since the exchange rate is one of the factors affecting the supply of the currency. Therefore, the best choice is E.

A Change in the Exchange Rate, Other Things Remaining the Same