What is the relationship between real interest rates and net exports?

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Hitesh Dharamdasani asked Dec 15, 2023

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What is the relationship between real interest rates and net exports?

Advanced Placement (AP)
high-school

Hitesh Dharamdasani asked Dec 15, 2023

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Answer:

When interest rates are cut, there is an increase both in spending on durables and net exports. Both channels lead to higher aggregate spending and thus higher output.

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Affian answered Dec 20, 2023

by Affian

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