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Determine the term - hot money
A large 'hot money' inflow shifts the demand curve for currency to the right, leading to exchange rate rising and to an overvalued exchange rate in terms of trading competitiveness of the country's exports. The current account of balance of payments is then about to deteriorate. If there is a shortage to start with, the deficit will grow larger. A large 'hot money' outflow will lead to opposite result.
What is Monetary base The monetary base is defined as the total value of all currency (banknotes and coins) outside the central bank and commercial banks' (net) reserves with t
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Assume the United States has the following consumption information: GDP = Income Consumption
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