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If a Country Makes Political Reforms So That People Now

question 128

Essay

If a country makes political reforms so that people now believe this country's assets are less risky, what happens to its interest rate, its exchange rate, and its net exports?


Definitions:

Double-declining-balance

An accelerated method of depreciation which doubles the normal depreciation rate, reducing the asset's book value more quickly.

Salvage Value

The forecasted price an asset will fetch at the time of sale once its period of usefulness is over.

Depreciation Expense

The allocation of the cost of an asset over its useful life to account for declines in value over time.

Double-declining-balance

An accelerated depreciation method that doubles the normal depreciation rate.

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