For each of the following situations, outline the effect on the price of the Canadian dollar in terms of US dollars and DRAW a demand and supply graph that illustrates the changes that occur in the fo

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For each of the following situations, outline the effect on the price of the Canadian dollar in terms of US dollars and DRAW a demand and supply graph that illustrates the changes that occur in the foreign exchange market for the Canadian dollar AND explain why.

a. A contractionary monetary policy initiated by the Bank Of Canada raises Canadian interest rates.

b. Canada’s real output rises at a time when real output in the United States is falling.

c. Americans (but not Canadians) find Canada a more attractive place to make financial investments.

d. Given Canada’s aging population, more Canadian “snowbirds” travel to the United States each winter.

e. Due to a credit crisis that affects US financial institutions more than it does Canadian ones, Canada’s attractiveness as a destination for direct and portfolio investment increases.

f. The Bank of Canada initiates an expansionary monetary policy that reduces Canadian interest rates.

g. Canada is viewed as a less attractive place to make financial investments by Americans but not by Canadians.

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