Draw a graph of the supply of and demand for the Canadian dollar (C$) by the U.S. market. Diagram the effect of each of the following on the exchange rate; state whether the effect is long, medium, or short run.
(a) More rapid growth in Canada than in the United States
(b) A rise in U.S. interest rates
(c) Goods are more expensive in Canada than in the United States
(d) A recession in the United States
(e) Expectations of a future depreciation in the Canadian dollar.