Answer to Question #134838 in Macroeconomics for Valerie

Question

Choose the correct answer
Over a period 2015-2019 South Africa experienced an increase in outflow of capital and a decline in capital inflows. The likely impact would be_______
1. a weaker rand against major foreign currencies and an increase in the demand for net exports.
2. a decrease in the demand of net exports and a leftward shift of the AD curve.
3. an increase in interest rates and depreciation of the rand against major foreign currencies.
4. a stronger rand against major foreign currencies and an increase in the demand for net exports

Answer 1

1. a weaker rand against major foreign currencies and an increase in the demand for net exports.