If People in the U

question 48

Essay

If people in the U.S. choose to save a smaller percentage of income, what will happen to the interest rate, net capital outflow, the exchange rate, and net exports?

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Definitions:

Normal Rates

The usual or average rates for something within a particular context, such as interest rates or growth rates.

Above Normal

Refers to performance, conditions, or results that exceed the usual or expected standard.

Prices

The monetary values assigned to goods, services, and assets in an economy, influencing demand, supply, and consumption.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, essentially covering its opportunity costs.