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1. Net exports are exports minus imports, with the real exchange rate being the main determinant. Net foreign investment is purchases of foreign assets by domestic residents minus purchases of domestic assets by foreigners, with the real interest rate being the main determinant. 2. The supply of loanable funds is positively sloped and the demand is negatively sloped. A higher interest rate encourages saving and raises supply, while making borrowing costlier and lowering demand. A higher domestic interest

Author

Ahmad Zarwi

Language

EN