Aggregate demand increases when the value of the Canadian dollar falls.

Name: Aggregate demand increases when the value of the Canadian dollar falls.
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Question

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When the value of the Canadian dollar falls, exports become cheaper, which increases foreign demand for Canadian goods and services. This leads to an increase in aggregate demand. Additionally, a lower Canadian dollar makes imports more expensive, which may lead to increased domestic production and further increase aggregate demand.

Aggregate Demand Increases When the Value of the Canadian Dollar