We are interested in understanding the relationship between the Canadian and US dollars. Explain whether the CANADIAN dollar would be expected to appreciate or depreciate under each of the following circumstances and explain WHY.In each case, assume the two countries under consideration are important trading partners. (4 points each)

(a) There is an increase in the real interest rates in the United States relative to Canada.

(b)Investment returns in the United States decrease relative to expected returns in Canada.

(c)Inflation in Canada falls relative to the inflation rate in the United States.

(d)The Canadians expect the value of the U.S. dollar to decline.

(e) The Bank of Canada raises interest rates fearing the inflationary pressures of a booming Canadian economy.