Term
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Definition
| domestic investment (I) + net capital outflow (NCO) (net capital outflow aka net exports NX) |
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Term
| at equilibrium interest rate |
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Definition
| the amount that people want to save exactly balances the desired quantities of domestic investment and net capital outflow |
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Term
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Definition
| government budget deficits raise real interest rates, crowd out domestic investment, cause the currency to appreciate, and push the trade balance toward deficit |
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Term
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Definition
| a government policy that directly influences the quantity of goods and services that a country imports or exports |
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Term
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Definition
| a large and sudden reduction in the demand for assets located in a country |
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Term
| trade policies do not affect the |
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Definition
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Term
| capital flight from Mexico increases Mexican interest rates and |
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Definition
| decreases the value of the Mexican peso in the market for foreign-currency exchange |
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