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AP Macroeconomics›Unit 6: Open Economy: International Trade and Finance›Open Economy: International Trade and Finance

Real Interest Rates and Capital Flows

Higher real interest rates attract foreign capital, appreciating the currency and changing net exports.

Capital inflows
Currency appreciation
Effects on net exports

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6Open Economy: International Trade and Finance

Balance of Payments
Exchange Rates and the Foreign Exchange Market
Real Interest Rates and Capital Flows

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Also called: capital flows