Scenario 32-1 ​

question 104

Essay

Scenario 32-1
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During a recession government revenues from the income tax fall and government transfers rise as the reduction in income and the rise in unemployment raise the number of people who qualify for benefits.
-Refer to Scenario 32-1. 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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Definitions:

Stemplots

A graphical representation of data that shows numerical frequencies using stems and leafs to display the distribution of a dataset.

Quantitative Variables

These are variables that represent numerical data which can be quantified or counted, allowing for mathematical operations to be performed on them.

Stemplots

A graphical method of displaying quantitative data, typically used to show the distribution of smaller datasets.

Histograms

Histograms are graphical representations of the distribution of numerical data, where the data is divided into bins or intervals, and the frequency of data points in each bin is depicted by the height of the bar.