Illustrate and explain how each market value of us dollar

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Reference no: EM1372491

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.

Reference no: EM1372491

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