The recent outbreak of COVID-19 has major impact on the Canadian
money and financial markets. To ensure the financial markets are
functioning smoothly, the Bank of Canada pumped liquidity into the
system. At the same time, firms now only accept credit cards or
mobile payment apps such as Goggle Pay, Apple Pay, PayPal as means
of payments. Many expect this would have a long-lasting impact on
the Canadian financial system.
a) “According to the asset approach to the exchange rate,...