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An increase in the foreign interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to ________,everything else held constant.
Capital Goods
Long-term physical assets used in the production of goods or services, such as machinery and buildings.
Current Consumption
The total amount of goods and services consumed at the present time, as opposed to savings for future consumption.
Time Preference
The inclination of individuals to prefer goods and services sooner rather than later.
Rational Expectations
The hypothesis that individuals form predictions of the future based on available information and act on those predictions rationally.
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