An increase in the price level in Canada will reduce exports and increase imports.

Name: An increase in the price level in Canada will reduce exports and increase imports.
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Question

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An increase in the price level in Canada will make Canadian goods relatively more expensive to foreign buyers and decrease demand for Canadian exports, reducing exports. At the same time, Canadian consumers may find foreign goods relatively cheaper due to the exchange rate effect, which could increase imports.

An Increase in the Price Level in Canada Will Reduce