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If the interest rate is 4 percent and the Fed desires to reduce or eliminate demand-pull inflation, ... D. more likely to produce an offsetting net export effect ...  Down

Chapter 12 Notes - Florida International University.doc

Government spending . Net exports. ... The net export function can be expressed in two ways. ... Where, is foreign income, is the real exchange rate, and ...  Down


The shift in the net export schedule causes the exchange rate to rise ...   Down

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    The shift in the net export schedule causes the exchange rate to rise.
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    or less) expensive relative to foreign goods or services, and so net export (falls or rises) Reminder 1: home currency depreciates when q rises.
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