Refer to the figure above. The curve in graph (b) O shows that the demand for imports is a downward-sloping function of the real interest rate. O is a part of the supply of loanable funds, which is the supply curve in graph (a). O shows how net capital outflow depends on the real exchange rate. O is a part of the demand for loanable funds, which is the demand curve in graph (a).

Refer to the figure above. The curve in graph (b) O shows that the demand for imports is a downward-sloping function of the real interest rate. O is a part of the supply of loanable funds, which is the supply curve in graph (a). O shows how net capital outflow depends on the real exchange rate. O is a part of the demand for loanable funds, which is the demand curve in graph (a).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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case study
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