Final answer:
If a country has a high rate of inflation relative to Canada (holding the real exchange rate fixed), the dollar will buy less in that country.
Step-by-step explanation:
If a country has a high rate of inflation relative to Canada (holding the real exchange rate fixed), the dollar will buy less in that country. This is because high inflation erodes the buying power of the currency, making it less valuable. For example, if a country's inflation rate is 10% and Canada's inflation rate is 2%, the value of that country's currency will decrease in comparison to the Canadian dollar. Therefore, the dollar will be able to buy less in that country.