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Suppose that real interest rates increase across Europe. Explain how this development affects U.S. net capital outflow. Then explain how it affects U.S. net exports by using a formula from the chapter and by drawing a diagram. What happens to the U.S. real interest rate and real exchange rate? B. Name two macroeconomic variables that decline when the economy goes into a recession. Name one […]

Suppose that real interest rates increase across Europe. Explain how this development affects U.S. net capital outflow. Then explain how it affects U.S. net exports by using a formula from the chapter and by drawing a diagram. What happens to the U.S. real interest rate and real exchange rate? B. Name two macroeconomic variables that decline when the economy goes into a recession. Name one […]

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