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If Speculators Believe a Currency Is Soon Going to Be

question 121

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If speculators believe a currency is soon going to be revalued,they will increase their demand for that currency.


Definitions:

Tax Rebate

A refund on taxes when the tax liability is less than the taxes paid.

Interest Rate

The percentage of a sum of money charged for its use, usually expressed as an annual percentage.

Net Capital Outflow

The difference between the domestic purchase of foreign assets and the foreign purchase of domestic assets.

Loanable Funds

The total amount of funds available in the financial markets for borrowing, which determines the market interest rates.

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