Other things the same,when a Canadian company imports wool from Australia,the open-economy macroeconomic model treats this transaction as a decrease in the quantity of dollars demanded in the Canadian foreign-currency exchange market.

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When a Canadian company imports wool from Australia, it needs to pay in Australian dollars. Therefore, it will increase the supply of Canadian dollars in the foreign-currency exchange market and increase the demand for Australian dollars. Thus, the open-economy macroeconomic model treats this transaction as a decrease in the quantity of dollars demanded in the Canadian foreign-currency exchange market.

Other Things the Same,when a Canadian Company Imports Wool from Australia,the