Everything else equal, how will a decrease in the interest rate in Mexico affect Mexico's GDP?
What will be an ideal response?
A decrease in the interest rate in Mexico will cause a decrease in the willingness to invest in Mexico. This will cause a fall in the demand for pesos and cause it to depreciate. A depreciation of the peso will encourage exports and discourage imports causing net exports from Mexico to rise. This will cause an increase in the GDP of Mexico.
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Is wealth the same thing as income?
What will be an ideal response?
If a country chooses to establish fixed exchange rates and an independent monetary policy, it gives up the ability to have ________
A) free capital mobility B) an independent fiscal policy C) capital controls D) an independent physical policy
GDP does not count:
a. the estimated value of homemaker production. b. state and local government purchases. c. spending for new homes. d. changes in inventories.
It is clear from the text that most economists assume the primary goal of all firms is to
a. maximize sales b. minimize cost c. maximize efficiency d. maximize profit e. minimize loss