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Speculation currency will increase
DA → SB →
Income increase
DB→SA→
Price level inflation increase
DA ← SB←
It could also be assumed that if A experiences inflation and B doesn’t A will buy B’s exports as they are relatively cheaper which would mean:
DB→SA→
Interest rates (increase gov budget deficit) increase
DA → SB→
increase interest rates lead to
currency appreciating and net export decreasing
If B’s interest rates decreased relative to A’s
DB ←SA←
Tastes increase for B’s export
DB→SA→