What happens to the cost of imported goods for Canadians if Canada has a balance of payments surplus under a floating exchange rate system?

Show Answers

Other currencies will increase in value compared to the Canadian dollarThe Canadian dollar will lose value against foreign currenciesImported products will become less expensive for CanadiansImported products will become more costly for Canadians

Explanation

When Canada experiences a balance of payments surplus with floating exchange rates, the Canadian dollar tends to appreciate. This appreciation makes foreign goods cheaper for Canadians to purchase.