Canada produces natural resources (coal, natural gas, and others), the demand for which has increased rapidly as China and other emerging economies expand.

a. Explain how growth in the demand for Canada’s natural resources would affect the demand for Canadian dollars in the foreign exchange market.
b. Explain how the supply of Canadian dollars would change.
c. Explain how the value of the Canadian dollar would change.
d. Illustrate your answer with a graphical analysis.