Unit 6.5 : FEM & Net Exports ; Unit 6.6 : Real IRs & International Capital Flows

exports; imports

A change in international value of a countries currency can drastically effect their _____ and _____

Net Exports decrease

How does appreciation of a countries currency affect their net exports?

Net Exports increase

How does depreciation of a countries currency affect their net exports?

Real IR decreases, Capital Flow decreases, International Demand for Dollars decrease, Value of Dollar decreases

What happens to value of dollars as a result of a change in real interest rates when Americans save more?

Loanable Funds, Net Capital Outflows, and US Dollars

These 3 graphs show how a change in the interest rate will affect the value of currency...

Loanable Funds Graph

Net Capital Outflow Graph

US Dollars Graph

What happens when savings increase?

What happens when investment increases?