Canadian Securities Course (CSC) Practice Exam

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Study for the Canadian Securities Course Exam with our comprehensive practice test. Explore flashcards and multiple-choice questions, each with detailed hints and explanations. Prepare for your CSC exam with confidence!

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What can increase exchange rates?

Increased government spending
Rising unemployment rates
Rising interest rates or sale of commodities
Decrease in exports

The correct answer is: Rising interest rates or sale of commodities

Exchange rates can be affected by a variety of factors, such as economic policies, market forces, and global events. Increased government spending, as seen in option A, can lead to inflation and a decrease in the value of a currency. Rising unemployment rates, as mentioned in option B, can also indicate a weakening economy and potentially lower demand for a currency. A decrease in exports, as mentioned in option D, can mean a decrease in demand for a country's currency as well. However, rising interest rates or the sale of commodities, as mentioned in option C, can lead to an increase in demand for a currency and push its value up. When a country's interest rates rise, it can attract more investors and traders looking for higher returns on their investments. Additionally, the sale of commodities, such as oil or precious metals, can generate revenue and increase the demand for a country's currency. So, while the other options may have a negative or neutral effect on exchange rates, rising interest rates or the sale of commodities can potentially increase exchange rates.