Suppose That,as a Result of a Financial Crisis in Asia,there

question 80

Essay

Suppose that,as a result of a financial crisis in Asia,there is a large decline in the demand for U.S.exports.
(A)What effect will this have on the interest rate and the four shares of GDP?
(B)Suppose that,at the same time,there is a sharp increase in the demand for U.S.dollar-denominated assets as a result of the financial crisis in Asia.Will this tend to offset or enhance the changes that you found in part (A)?

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Definitions:

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