When the Bank of Canada raises interest rates, the Canadian dollar

Name: When the Bank of Canada raises interest rates, the Canadian dollar
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Question

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When the Bank of Canada raises interest rates, it typically leads to an appreciation of the Canadian dollar because higher interest rates offer higher returns to investors holding Canadian dollars. This appreciation can create a negative demand shock as Canadian goods become more expensive for foreign buyers, reducing the demand for Canadian exports.

When the Bank of Canada Raises Interest Rates, the Canadian