3. Suppose that Canada decides to peg its dollar (SC, or the loonie) to the U.S. dollar at an exchange rate of SC1= SUSI. a. What is likely to happen to U.S. GDP following the leftward shift of its IS curve? b. Will there be pressure for the Canadian dollar to change in value against the U.S. dollar as a result of the leftward shift of the U.S. IS curve?

3. Suppose that Canada decides to peg its dollar (SC, or the loonie) to the U.S. dollar at an exchange rate of SC1= SUSI. a. What is likely to happen to U.S. GDP following the leftward shift of its IS curve? b. Will there be pressure for the Canadian dollar to change in value against the U.S. dollar as a result of the leftward shift of the U.S. IS curve?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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