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Analytical: Assume there are only 2 countries in the world, Canada and Germany Using a diagram describing both the Canadian money market and the foreign
Analytical: Assume there are only 2 countries in the world, Canada and Germany Using a diagram describing both the Canadian money market and the foreign exchange market, analyze the effects of a permanent increase in the Canadian money supply on the price level, real money supply, interest rates, and the dollar/euro exchange rate. Assume there is no change in the German money supply
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