When Canadian real GDP decreases, the growth effect alone causes the Canadian dollar to depreciate.

Name: When Canadian real GDP decreases, the growth effect alone causes the Canadian dollar to depreciate.
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The growth effect refers to the negative impact of lower real GDP on investor confidence and expectations for the future performance of the Canadian economy, which can cause a decrease in demand for the Canadian dollar and a subsequent depreciation in its value.

When Canadian Real GDP Decreases, the Growth Effect Alone Causes