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d) Suppose the rate of money growth is higher in the U.S. than in Canada. What will happen in the long run to the value
d) Suppose the rate of money growth is higher in the U.S. than in Canada. What will happen in the long run to the value of the Canadian Dollar relative to the U.S. Dollar assuming that everything else stays the same? Explain your answer using your knowledge of the quantity theory of money and PPP theory. Make sure that you explain in detail the underlying mechanisms that link differences in money growth rates to changes in the exchange rate
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