Assume a country experiences heavy capital outflows. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions? Assume the exchange rate is stated as: (Domestic currency/Foreign currency)
a. Start the analysis in the foreign exchange market with demand shifting to the right.
b. Start the analysis in the foreign exchange market with supply shifting to the left.
c. Start the analysis in the foreign exchange market with supply shifting to the right.
d. Start the analysis in the real credit market with demand shifting to the left.
e. Start the analysis in the real credit market with demand shifting to the right.
.C
Economics
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