Business, 19.04.2021 15:50 shiba8667

Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar torise in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will thereforefall , and the number of foreign products purchased by domestic consumers and firms (imports) willrise . Net exports will thereforefall , causing the quantity of domestic output demanded tofall . This phenomenon is known as theexchange rate effect

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Additionally, as the price level rises, the impact on the domestic interest rate will cause the real...

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