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Q. Canadian demand for US dollar is downward sloping and supply of US dollar to Canadians is upward sloping. Assuming a system of flexible exchange rates between US and Canada, graphically illustrate and explain how each of following would affect market value of US dollar:

i) Canada experiences severe deflation

ii) US engages in an expansionary monetary policy

iii) rate of productivity growth in US rises sharply.

 

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M9307795

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