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    Principles of Economics Study Set 7
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    Exam 32: A Macroeconomic Theory of the Open Economy
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    Refer to Budget in Recession
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Refer to Budget in Recession

Question 300

Question 300

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Refer to Budget in Recession. This change in the deficit causes net capital outflow to change. How is this change in net capital outflow shown in the market for foreign-currency exchange? What happens to the exchange rate?

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The supply of domestic currenc...

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