Deflation in Canada would tend to make the exchange rate of the dollar depreciate.

Name: Deflation in Canada would tend to make the exchange rate of the dollar depreciate.
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Deflation, or a decrease in the overall price level, tends to increase the value of a currency because it increases purchasing power. Therefore, deflation in Canada would tend to make the exchange rate of the dollar appreciate rather than depreciate.

Deflation in Canada Would Tend to Make the Exchange Rate