1. The problem asks how changes in economic factors affect the demand for Canadian dollars. 2. First, consider the effect of a decrease in world demand for Canadian exports on the demand for Canadian dollars. Since exports bring foreign currency that must be exchanged for Canadian dollars, a decrease in exports means less demand for Canadian dollars. So, demand decreases. 3. Next, a fall in the Canadian interest rate differential means Canadian interest rates are lower relative to other countries. Lower rates make Canadian assets less attractive, reducing demand for Canadian dollars. So, demand decreases. 4. Therefore, the first pair of blanks is: "decreases; decreases" which corresponds to option C. 5. Now, consider a rise in the expected future exchange rate of the Canadian dollar. If the Canadian dollar is expected to be stronger in the future, investors want to buy Canadian dollars now to benefit from appreciation, increasing demand. 6. An increase in Canadian demand for imports means Canadians need more foreign currency to pay for imports, so they sell Canadian dollars to buy foreign currency, decreasing demand for Canadian dollars. 7. Thus, the second pair of blanks is: "increases; decreases" which corresponds to option D. Final answers: - First question: C. decreases; decreases - Second question: D. increases; decreases