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16.5 Balance of trade concerns  (Page 8/9)

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  • Card 8 / 9:
    Use the demand-and-supply of foreign currency graph to determine what would happen to a small, open economy that experienced capital outflows.

    The demand for the country’s currency would decrease, lowering the exchange rate.

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Source:  OpenStax, Principles of macroeconomics. OpenStax CNX. Jan 09, 2015 Download for free at http://legacy.cnx.org/content/col11750/1.2
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