Inflation Effects on Exchange Rates Assume that the U.S. inflation rate becomes high relative to Canadian inflation.

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Inflation Effects on Exchange Rates Assume that the U.S. inflation rate becomes high relative to Canadian inflation. Other things being equal, how should this affect the

(a) U.S. demand for Canadian dollars,

(b) supply of Canadian dollars for sale, and(c)

equilibrium value of the Canadian dollar?

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