Supply of canadian dollars available for sale in market

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Reference no: EM131163853

If the US inflation rate becomes high relative to Canadian inflation the following outcomes will occur for the scenarios listed - a) The demand for Canadian dollars will increase; b) The supply of Canadian dollars available for sale in the market will decrease; c) The value of the Canadian dollar will increase Assuming all other things remain equal. Is not the converse true? Given π = m + v - y, and given that the situation shows no evidence of a change in the rate of velocity or of national income, an increase in inflation reflects a direct increase in nominal money supply, m. Correct?

Reference no: EM131163853

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