ishaniarora wrote:
Could you please explain this question in detail?
If we simplify the question it becomes the following:
For some reason the Interest rate will have to be changed.
But Interest rate change will widen the trade surplus since Export is already rising faster than Import.
Pre-thinking: Now we have to explain this phenomenon why interest rate change will lead to more trade surplus ??
Interest rate change will reduce investment capital for firms ( now we need to relate: Interest rate change leads to lower Investment but lower investment somehow leads to difference in Surplus )
D. Correctly explains how lower investment capital leads to lower Imports and that ofcourse leads to wider surplus.
Statistics : Posted by sachi-in • on 18 Dec 2023, 04:31 • Replies 5 • Views 967
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