c. Let us summarize. Suppose the exchange rate depreciates due to a lower demand for Canadian exports. This would result in O A. a rightward shift of the AD curve. The appropriate response by the Bank of Canada is to tighten monetary policy. O B. a rightward shift of the AD curve. The appropriate response by the Bank of Canada is to loosen monetary policy.

c. Let us summarize. Suppose the exchange rate depreciates due to a lower demand for Canadian exports. This would result in O A. a rightward shift of the AD curve. The appropriate response by the Bank of Canada is to tighten monetary policy. O B. a rightward shift of the AD curve. The appropriate response by the Bank of Canada is to loosen monetary policy.

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter19: The International Monetary System: Order Or Disorder

Section: Chapter Questions

Problem 8DQ

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