Consider the exchange rate between Canadian dollars and Mexican pesos. Assume the income level in Mexico rises while the income level in Canada remains constant. Then (1) The demand for Canadian dollars shifting the demand curve of Canadian dollars to the (2) The supply for Mexican pesos shifting the supply curve of Mexican pesos to the (3) Consequently, the Canadian dollar against Mexican pesos. decreases; right outward); decreases, left (inward); appreciate increases, right (outward); increases, right (outward); appreciate decreases; left (inward): increase, right outward): depreciate increases: right outward): Increases, right (outward); depreciate