Why do increases in the real interest rate lead to decreases in net exports, and vice versa?

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

The Economics of Money Banking and Financial Markets

ISBN: 978-0133836790

11th edition

Authors: Frederic S. Mishkin

See More Books

Question Posted: Nov 03, 2017 04:05 AM

See More Questions

Why is the real interest rate the opportunity cost of loanable funds?
Why does a change in the foreign real interest rate lead to a shift of the AD curve?
In each of the cases below, what happens to equilibrium output? Briefly explain how it affects the relevant component(s) of planned spending. a. The real interest rate rises. b. The marginal...
Racing Investment Fund 2000 LLC was created in August 2000 to purchase, train, and race thoroughbred horses. The LLC ' s operating agreement provided for 50 membership units to be sold for an initial...
Show that the electric field of a ("pure") dipole (Eq. 3.103) can be written in the coordinate-free form (2 cos e f + sin ). Edip (r, A) (3.103) 40r3
Consider 500 uniform electric field lines that pass through a hollow tube of length $10 \mathrm{~m}$ and cross-sectional area $1 \mathrm{~m}^{2}$. If the tube is cut at the middle in such way the...
Define the following : (a) Indicated power (b) Brake power (c) Mechanical efficiency (d) Indicated and brake thermal efficiency (e) Relative efficiency
If a 6%, 10-year, $800,000 bond is issued at face and interest is paid annually, what is the amount of the interest payment at the end of the first period?
Hi - Low Ltd has analysed its distribution costs and activity over the past 3 months and these are as follows: Monthly Distribution costs Units sold January 1 6 1 , 0 0 0 5 0 , 0 0 0 February 2 5...
Which distribution strategy-intensive, selective, or exclusive-is used for the following products and why? (a) Piaget watches, (b) Acura automobiles, and (c) Snickers chocolate bars.
If households and firms believe the economy will be in a recession in the future, will this necessarily cause a recession, or have any impact on output at all?
Why does equilibrium output increase as the marginal propensity to consume increases?
The mean temperature (of daily maximum temperatures) in July for DallasFt. Worth, Texas, is 85 degrees. Assuming a normal distribution, what would the standard deviation have to be if 10% of days...
The force exerted by a 2.4-m massless string on a 0.84-kg object being swung in a horizontal circle is 4.2 N. What is the tangential velocity of the object?
A house with a total living area of 2,500 square feet would cost $110 per square foot to reproduce new. It has an expected economic life of 50 years and is estimated to have an effective age of five...
Explore the procedure for ethical decision-making in the face of conflicting obligations, as described in Chapter 2. List the various conflicting obligations that Goldman Sachs executives might have...
$400,000 for a new technology.The lender charges them 36% annually with monthly compounding.The agreement calls for no payment until the end of the first month of the 5th year with equal monthly...
How do taxes and regulation impact the equity of budgeting decisions and as a public manager/administrator/analyst, how would one balance the need for taxation and the mandate to provide equitable...
What is the difference between the scattergraph method and the least-squares regression method?
Suppose that the electrical potential at the point (x, y, z) is E(x, y, z) = x + y - 2z. What is the direction of the acceleration at the point (1,3,2)?
If the interest rate is 4% on euro deposits and 2% on dollar deposits, while the euro is trading at $1.30 per euro, what does the market expect the exchange rate to be one year from now?
If the dollar begins trading at $1.30 per euro, with the same interest rates given in Problem 3, and the ECB raises interest rates so that the rate on euro deposits rises by 1 percentage point, what...
If the president of a bank told you that the bank was so well run that it has never had to call in loans, sell securities, or borrow as a result of a deposit outflow, would you be willing to buy...
Assume that in Bolivia it takes 9 0 hours of labor to produce a ton of salt and 6 0 hours of labor to produce a ton of soybean oil. In addition, assume that in Brazil it takes 8 0 hours of labor to...
Should governors have centralized power, particularly when dealing with crisis situations? Or should the formal power of the governor remain relatively weak? (You are required to write 100-150 words)
Each scoop of ice cream costs $ 6 . Your benefit associated with each scoop decreases with each additional scoop because you start to get a stomach ache. How many scoops of ice cream should you eat...

Why do increases in the real interest rate lead to decreases in net exports, and vice versa?

Question:

Step by Step Answer:

When the real interest rate increases this increases the demand for do...View the full answer

The Economics of Money Banking and Financial Markets

Students also viewed these Micro Economics questions