An increase in the Canadian money supply would cause the value of the dollar to ________ and net Canadian exports to ________ in the short run using a Keynesian model.

Question

Quizplus · Accepted Answer

An increase in the money supply typically leads to lower interest rates, which can cause the currency to depreciate (fall in value). A weaker currency makes exports cheaper for foreign buyers, potentially increasing net exports.

An Increase in the Canadian Money Supply Would Cause the Value