Assume that as a result of increased political instability, investors move their funds out of the country
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Assume that as a result of increased political instability, investors move their funds out of the country of Wacziargland. (a) How will this decision by investors affect the international value of Wacziargland currency (referred to as the Claire) on the foreign exchange market? Explain. (b) Using a correctly labeled graph of the loanable funds market in Wacziargland, show the impact of this decision by investors on the real interest rate in Wacziargland. (c) Given your answer in part (b), what will happen to Wacziargland's rate of long-run economic growth? Explain.
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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