Other Things the Same, If the U

question 28

Short Answer

Other things the same, if the U.S. interest rate rises, U.S. assets become ____ attractive. So, desired net capital outflow _____. This change in net capital outflow, shifts the __________ curve in the market for foreign-currency exchange to the ______.

---

Definitions:

Maquiladoras

Factories in Mexico, typically owned by foreign companies, that import raw materials and produce goods for export, benefiting from lower labor costs.

Manufacturing Plants

Facilities where raw materials are transformed into finished goods through various processes and machinery.

Duty-Free

A retail environment where goods are sold to international travelers without the inclusion of certain local or national taxes and duties.

Central-Planning Economy

An economic system where the government or central authority makes all decisions regarding the production and distribution of goods and services.