Explain about the following graphs:Figure 7 The Effects of Capital Flight(a) The Market for Loanable Funds in MexicoDI Mexican Net Capital OutflowRealInderestReal1. An inoreaaein net capitaloutlow..SuppiyInterestRateRate3...whichIncreaseshe intareatrate2....increases the damandfor loanable tunds.QUantry ofLoanable FundsNet CapitalOutflowRealExchangeRate4. A the sametime, he increaseNin nat capitaloutfowIncreases fhesupply af pasas.6....whichEcauses hepesotodepredateDemandQuansty ofPesos(C) The Market for Foreign-Currency ExchangeCopyright2003 Soutwem/Thomacn Leamirg

Capital flight: It refers to the outflow of capital from a country when an economy is declining or…

Explain about the following graphs: Figure 7 The Effects of Capital Flight (a) The Market for Loanable Funds in Maxico DI Mexican Net Capital Outflow Real Interest Real nterest 1. An inareaae n net capital outon. Suppiy Rate Rate 3..which ncreases ne intareat rate 2... .ncreases the damand for loanable tunds... Quantty of Loanatle Funds Net Capital Outflow Real Exchange Rate 4. AL the same time, he increase in nat captal outfow Increases fhe aupply af pasas. 6....which causes he pesoto depredate. Demand Quandity of Pesos (C) The Market for Foreign-Currency Exchange Copyrigh2003 Southweem/Thomacn Leaming

Explain about the following graphs: Figure 7 The Effects of Capital Flight (a) The Market for Loanable Funds in Maxico DI Mexican Net Capital Outflow Real Interest Real nterest 1. An inareaae n net capital outon. Suppiy Rate Rate 3..which ncreases ne intareat rate 2... .ncreases the damand for loanable tunds... Quantty of Loanatle Funds Net Capital Outflow Real Exchange Rate 4. AL the same time, he increase in nat captal outfow Increases fhe aupply af pasas. 6....which causes he pesoto depredate. Demand Quandity of Pesos (C) The Market for Foreign-Currency Exchange Copyrigh2003 Southweem/Thomacn Leaming

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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