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As interest rates fall in the United States, capital flows out of the country because the lower interest rates are a disincentive for foreign and domestic capital. As capital flows out of the nation, the demand for the dollar decreases. As demand for the dollar decreases, the value of the dollar depreciates. When the dollar depreciates, goods made in the United States appear less expensive to domestic and foreign consumers. Therefore, imports decrease while exports increase.
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Does the precautionary demand for money decreases as the interest rate decreases?
Decreases when the inflation rate increases
When a country experiences capital flight what is the effect on its interest rate and exchange rate?
interest rate decreases and exchange rate increases
What is the relationship between interest rate and discount rate?
When interest rates increases currency value appreciates while when interest rate decreases so the currency rates depreciates
In which situations is it certain that the quantity of money demand by the public will decrease?
nominal GDP decreases and the interest rate decreases
What happens when issuing bonds payable when the market interest rate is less than the stated interest rate?
premium
When interest rate is positive what happens to value of money?
Decreases
When interest rate is positive what happens to the value of money as?
decreases
What happens to the present value of an annuity when the interest rate decreases?
it increases
Does the precautionary demand for money decreases as the interest rate decreases?
Decreases when the inflation rate increases
What happens to the present value of an annuity when the interest rate raises?
decreases towards the future value faster
When a country experiences capital flight what is the effect on its interest rate and exchange rate?
interest rate decreases and exchange rate increases
What decreases the Present value of an annuity?
Increasing the interest rate
What happens to the rate constant as energy increases?
The rate constant decreases.
What is the relationship between interest rate and discount rate?
When interest rates increases currency value appreciates while when interest rate decreases so the currency rates depreciates
What happens as the population decreases?
As a population decreases the death rate is higher or equal to the birthrate.
What happens to the rate of photosynthesis if the concentration of carbon dioxide decreases?
It decreases with it. CO2 is essential for it
What happens to the rate constant as activation energy increase?
The rate constant decreases.
