How does an increase in interest rates affect net exports?
What will be an ideal response?
A higher domestic interest rate makes returns on domestic financial assets more attractive relative to those on foreign assets, which increases the demand for the domestic currency. The increased demand for the domestic currency raises the exchange rate, which increases imports and reduces exports, thereby reducing net exports.
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The fraction of the working-age population that is in the labor force is called the
A) labor force participation rate. B) unemployment rate. C) employment rate. D) nonresponse rate.
A student at New York University used to take the Redhound bus when she visited her grandmother in Boston
After graduating, although the bus fare and the plane fare were the same as they were when she was a student, with a well-paid job on Wall Street she now takes the plane to Boston to visit her grandmother. For this student, travel by Redhound bus is A) a normal good. B) an inferior good. C) a substitute good. D) a complement good. E) a good with negative preferences.
In the short run,
a. economic profit is always zero b. economic loss is always zero c. some inputs are fixed d. the number of firms in an industry can vary e. technology is indeterminate
Studies show that during the March Madness college basketball tournament, the productivity of the average company in the US falls considerably. This is an example of
a. the Condorcet Paradox. b. signaling. c. moral hazard. d. screening.