Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 14, Problem 8PA
To determine
The impact of increased real interest rate in Europe on the US.
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Suppose that real interest rates increase across Europe. Explain how this development will affect U.S. net capital outflow. Then explain how it will affect U.S. net exports by using a formula from the chapter and by drawing a diagram. What will happen to the U.S. real interest rate and real exchange rate?
Suppose that real interest rates increase across Europe.Explain how this development will affect U.S. net capital outflow.Then explain how it will affect U.S.net exports by using a formula from the chapter and by drawing a diagram. What will happen to the U.S.real interest rate and real exchange rate?
Explain how exchange rates can affect a firm’s global sales.
Chapter 14 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
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