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Assuming All Other Things Equal, What Would Happen to the Canadian

question 167

Essay

Assuming all other things equal, what would happen to the Canadian dollar real exchange rate under each of the following circumstances?
a. The Canadian nominal exchange rate depreciates.
b. Canadian domestic prices increase.
c. Prices in the rest of the world rise.


Definitions:

Government Intervention

Actions taken by a government to affect the economy, which can include regulations, subsidies, and taxes.

Supply-Siders

are economists who believe that changes in marginal tax rates and the ability to supply goods in the economy significantly influence economic growth.

Work More

The concept or action of increasing the amount of effort or hours spent on labor or tasks.

New Classical Economists

Economists who advocate for the theory that markets are clear and that prices, wages, and rates adjust quickly to equilibrate supply and demand.

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