Question 1-Refer to the graph above to answer this question. Suppose that the demand for the American dollar shifts from D1 to D2. What might be the reason for this shift?a.The prices of Canadian goods and services have increased relative to American prices.b.The Canadian dollar has depreciated.c.The prices of American goods and services have increased relative to Canadian prices.d.Interest rates in the USA have increased relative to Canadian rates.e.The Canadian economy has entered a boom period.Question 2-Refer to the graph above to answer this question. What might cause a shift of the demand curve from D1 to D2?a.Interest rates in the US have increased relative to Canadian rates.b.The prices of US goods and services have decreased relative to Canadian prices.c.The Canadian dollar has depreciated.d.The Canadian economy has entered a boom period.e.Interest rates in the US have decreased relative to Canadian rates.Question 3-Refer to the graph above to answer this question. Assume that the demand for the U.S. dollar was to shift from D1 to D2 and that exchange rates were flexible. What would result?a.The value of the U.S. dollar in Canadian terms would increase to OC.b.The demand for the Canadian dollar would fall by a similar amount.c.A problem of rationing a shortage of U.S. dollars would arise in Canada.d.The value of the Canadian dollar in U.S. terms would rise from 1/OB U.S. dollars equals Can $1, to 1/OA U.S. dollars equals Can $1.

SECTION BREAK. Answer all the part questions. US $ in Canadian $ o H J Quantity of US