AWhat factors determine t

AWhat factors determine t

AWhat factors determine the sensitivity of net exports to the interest rate?BConsider the cases where net exports are very sensitive to the interest rate and where they are very insensitive. Compare the effect that an increase in the economy supply has on output, the interest rate, investment and the trade balance for each caseCSuppose foreign manufacturer s maintain a fixed dollar price for their goods regardless of the exchange rate. Does this result in the net exports being more or less sensitive to the interest rate?DGiven this behavior, explain why the only way the monetary authorities could act to reduce the trade deficit is by inducing a recession

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