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(d) Suppose that instead of restricting imports or giving explicit advantages to Canadian-made products, the Bank of Canada enters the foreign exchange market and

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(d) Suppose that instead of restricting imports or giving explicit advantages to Canadian-made products, the Bank of Canada enters the foreign exchange market and buys up large quantities of foreign currency. Explain how this action could reduce unemployment in Canada. (Hint: a large segment of Canadian goods and services are exported to the U.S. and overseas.)

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