Foreign Exchange Market and Net Exports - AP Macroeconomics

Exports decrease as domestic goods become less competitive. Higher costs reduce price competitiveness.

Net exports decrease as exports fall and imports rise. Stronger currency hurts trade balance.

Currency value typically depreciates with higher inflation. Reduces purchasing power and competitiveness.

Monetary policy. Interest rate changes affect currency flows.

Increased demand for the currency. Higher demand relative to supply drives price up.

Currency depreciates as demand for imports decreases. Economic weakness reduces currency attractiveness.

Currency appreciates as interest rates increase. Tighter money policy strengthens currency.

Currency depreciates as foreign reserves increase. Increases money supply in domestic currency.

Increased imports or capital outflow. More currency offered in exchange markets.

Increases foreign investment as assets become cheaper. Lower asset prices attract foreign buyers.

Exports decrease as domestic goods become more expensive abroad. Higher relative prices reduce foreign purchasing power.

Currency value tends to appreciate as foreign investors seek higher returns. Capital flows toward higher-yielding investments.

Net exports increase as exports rise and imports fall. Weaker currency improves trade competitiveness.

Net Exports = Exports - Imports. Simple difference between total exports and imports.

An inverse relationship; higher exchange rates usually lower net exports. Stronger currency hurts export competitiveness.

Currency depreciates as demand for it falls. Less export revenue reduces currency demand.

It leads to currency appreciation. Export earnings increase currency demand.

Net exports decrease as domestic output rises. Higher income increases import demand.

Exports increase as domestic goods become cheaper abroad. Relatively cheaper goods boost competitiveness.

Currency depreciates as capital outflows increase. Lower returns reduce foreign investment appeal.

Decrease in foreign demand for domestic goods. Reduced export demand weakens currency.

GDP decreases as net exports fall. Exports are a component of GDP.

Imports decrease as foreign goods become more expensive domestically. Weaker currency makes foreign goods costlier in domestic terms.

Imports increase as domestic demand rises. Higher income drives consumption of foreign goods.

Currency appreciates due to higher foreign capital inflow. Higher returns attract foreign investment.

Currency appreciates. Capital inflows increase currency demand.

Increased imports or capital outflow. More currency offered in exchange markets.

Currency tends to depreciate. Import excess creates currency supply pressure.

Currency depreciates as demand for imports decreases. Economic weakness reduces currency attractiveness.